The MO verdict
For a retiree planning withdrawals in 2026, Missouri is a middle-of-the-road state for retirement taxation. Ss exempt regardless of income (2024 reform), public pension exclusion.
There is meaningful state tax on Roth conversions, but the rate is not punitive. Modeling the joint federal + state + ACA cliff cost matters — small conversions can be efficient, large conversions less so.
Worked example: $30k Roth conversion in Missouri
Consider a married couple age 58 in Missouri with $75,000 of taxable income, both on ACA Marketplace coverage. They want to convert $30,000 from a traditional IRA to a Roth. At Missouri's 4.70% top marginal rate, the state tax on that conversion is approximately $1,410. Federal tax at the 22% bracket adds another $6,600. And because the conversion pushes their MAGI to $105,000 — over the 400% FPL cliff of $81,760 — they lose their full ACA premium tax credit, roughly $12,000. Total cost of the $30,000 conversion: about $20,010, or an effective 66.7% marginal rate. The federal-state-ACA stack matters in Missouri.
Cost breakdown
| Component | Amount |
|---|---|
| Federal income tax (22% bracket) | $6,600 |
| Missouri state income tax | $1,410 |
| ACA premium tax credit clawback | $12,000 |
| Total cost on $30,000 conversion | $20,010 (66.7% effective) |
Why the ACA cliff hits hard in Missouri
The 400% federal-poverty-level cliff is federal, not state-specific — but its dollar impact depends on the benchmark Silver-plan premium in your county. Missouri's Marketplace pricing and your household composition determine the size of the subsidy at risk. A two-person household near 400% FPL can easily have $10,000–$15,000 of annual premium tax credit on the line. Under the OBBBA 2026 restoration of the cliff, $1 of additional MAGI above 400% FPL eliminates the entire credit.
For 2026 the 400% FPL threshold is:
- Household of 1: $60,240
- Household of 2: $81,760
- Household of 3: $103,280
- Household of 4: $124,800
Optimal Roth conversion strategy for Missouri
The MO-specific playbook depends on tier:
- Identify your cliff distance. Compute MAGI from all income sources (wages, capital gains, interest, dividends, traditional withdrawals). Find your headroom under 400% FPL. Use the ACA cliff embed for a quick check.
- Stay under the cliff if you can. In Missouri at 4.70%, the marginal cost of going over the cliff is federal tax + state tax + full PTC clawback. The break-even conversion size is smaller than in tax-free states.
- If you must go over, convert big. Once you've crossed the cliff, additional conversion dollars only cost federal + state tax (no incremental PTC loss). A "rip the bandage" conversion year can be efficient if you have many traditional dollars to move.
- Coordinate with capital gains and 0% LTCG bracket. In Missouri, long-term capital gains stack with ordinary income. Time conversions in years when you have low-income headroom.
- Plan ahead for IRMAA. The IRMAA Medicare premium surcharge has a 2-year lookback. A Missouri resident in their early 60s converting today will see IRMAA implications at 65.
State tax basics for Missouri retirees
| Question | Missouri |
|---|---|
| State income tax | 4.70% top marginal |
| Number of brackets | 9 |
| Social Security taxed | No |
| 401(k) / Traditional IRA taxed | Yes |
| State estate / inheritance tax | No |
| Retirement-friendliness tier | moderate |
| Notable feature | SS exempt regardless of income (2024 reform), public pension exclusion |
Model your full Missouri retirement scenario
Free 10,000-path Monte Carlo with state-specific tax engine, ACA cliff, Roth conversion optimizer, IRMAA lookback — all in your browser, no signup.
Run a free simulation →Related calculators and reading
- All-states retirement tax comparison — see Missouri alongside the other 50 jurisdictions.
- ACA Subsidy Cliff Optimizer — find the largest Roth conversion that keeps you under 400% FPL.
- Roth Conversion Optimizer — bracket-fill vs. fixed-amount strategy comparison.
- IRMAA Lookback Calculator — Medicare premium surcharge based on 2-year-old MAGI.
- Safe Withdrawal Rate Calculator — sequence-of-returns-aware withdrawal planning.
- Research: Monte Carlo ACA Cliff 2026 — 80,000-path study of the cliff cost.
FAQ
Does Missouri tax Roth conversions?
Missouri taxes Roth conversions as ordinary income at the state level. At a top marginal rate of 4.70%, a large conversion can add meaningful state-tax cost on top of federal tax and the ACA cliff.
What is the ACA cliff in Missouri for 2026?
The ACA premium-tax-credit cliff is a federal threshold, not state-specific. For a household of two in 2026, it sits at 400% of the federal poverty level — $81,760. Crossing it by even $1 of MAGI eliminates the full subsidy under the OBBBA 2026 rules.
Is Missouri a good state to retire for tax purposes?
Missouri is a middle-of-the-road state for retirement taxation. Ss exempt regardless of income (2024 reform), public pension exclusion.
Does Missouri tax Social Security benefits?
Missouri does not tax Social Security benefits at the state level.
Does Missouri have a state estate or inheritance tax?
No — Missouri does not impose a state-level estate or inheritance tax.
Last updated 2026-05-12. State income tax data sourced from the Missouri Department of Revenue and the Tax Foundation's 2026 state tax facts publication. ACA poverty-level figures from HHS 2026 Federal Register. This page is educational. Not tax, legal, or financial advice — consult a qualified advisor.