Missouri Code of State Regulations › Title 12 - DEPARTMENT OF REVENUE › Division 10 - Director of Revenue › Chapter 2 - Income Tax › Section 12 CSR 10-2.030 - Non-Standard Tax Periods, Subsequent Change of Accounting Period, and Personal and Dependency Exemption Deductions

Current through Register Vol. 49, No. 14, July 15, 2024
PURPOSE: This rule addresses changes in tax periods,
				  short tax periods, 52-53 week tax periods, and the determination of the amount
				  of an individual taxpayer's allowable personal and dependency exemption
				  deductions.
(1) If a
				taxpayer's taxable year is changed for federal income tax purposes, the
				Missouri taxable year will automatically be changed. No application for change
				of accounting period for Missouri income tax purposes will be required. If a
				short taxable period for federal income tax purposes results from a change in
				the taxpayer's accounting period, the taxpayer also shall file a Missouri
				income tax return for that short taxable period.
(2) If there is a short taxable period,
				Missouri taxable income shall be computed on the basis of the short taxable
				period for which the return is made and in accordance with the statutory
				provisions of sections
				143.011 to
				143.996, RSMo, applicable to the
				determination of Missouri taxable income generally, except that the amount of
				deductions allowed by sections
				143.151 and
				143.161, RSMo, shall be reduced
				to the amount which bears the same ratio to the full amount for those
				deductions as the number of months in the short taxable period bears to twelve
				(12) months.
(3) Pursuant to section
				143.151, RSMo, a resident shall
				generally be allowed a personal exemption deduction of two thousand one hundred
				dollars ($2,100) for such resident and two thousand one hundred dollars
				($2,100) for such resident's spouse if the resident is entitled to a deduction
				for such personal exemptions for federal income tax purposes. A resident with a
				Missouri adjusted gross income of less than twenty thousand dollars ($20,000)
				shall generally be allowed an additional deduction of five hundred dollars
				($500) for such resident and an additional five hundred dollars ($500) for such
				resident's spouse if the resident is entitled to a deduction for such personal
				exemptions for federal income tax purposes, and the spouse's Missouri adjusted
				gross income is less than twenty thousand dollars ($20,000). None of the
				deductions described in sections
				143.151, RSMo, or in subsections
				1 or 3 of section 143.161, RSMo, shall be allowed
				for a given tax period if the exemption amount as defined under
				26 U.S.C. section
				151 is zero (0) for that tax
				period.
(4) A resident who
				qualifies as an unmarried head of household or as a surviving spouse for
				federal income tax purposes may generally deduct an additional one thousand
				four hundred dollars ($1,400) pursuant to section 143.161.2, RSMo. This
				additional deduction for a taxpayer who qualifies as an unmarried head of
				household or a surviving spouse is not dependent on the taxpayer's eligibility
				for a dependency exemption deduction under section 143.161.1, RSMo.
(5) Example: Tom Taxpayer, a resident
				individual, has been filing his federal and Missouri income tax returns on the
				basis of a fiscal year ending September 30. He changes to a calendar year basis
				and files a federal income tax return for the short taxable period October 1 to
				December 31. He qualifies as a surviving spouse for federal income tax
				purposes. For his short taxable period, the exemption amount defined under
				26 U.S.C. section
				151 is zero (0). He has no federal income tax
				liability for the tax year. His federal adjusted gross income (FAGI) for the
				short taxable period is as follows:
United States bond interest
Savings bank interest
$ 40
$ 60
FAGI
$3,100
His Missouri taxable income is as
							 follows:
FAGI
$3,100
Less modification for United States bond
							 interest
$ (40)
Missouri adjusted gross income
$3,060
Federal itemized deduction
$(250)
(note that no federal standard deduction is allowable
							 for short-period returns resulting from a change in tax period; no Missouri
							 modifications to the itemized deduction are applicable in this
							 example)
Surviving Spouse Additional Exemption
							 Deduction
($1,400 × 3/12) =
$(350)
Missouri taxable income
$2,460
(6) A
				taxpayer which, for federal income tax purposes, has elected to use a taxable
				year that varies from 52 to 53 weeks is referred to by this rule as "52-53 Week
				Taxpayer." A 52-53 Week Taxpayer shall determine the effective date or the
				applicability of any provision of sections
				143.011 to
				143.996, RSMo, that is expressed
				in terms of taxable years beginning, including, or ending with reference to a
				specified date which is the first or last day of a month by treating the
				taxpayer's 52-53 week taxable year as though it begins on the first day of the
				calendar month beginning nearest to the first day of such taxable year, or as
				though it ends with the last day of the calendar month ending nearest to the
				last day of such taxable year, as the case may be. See
				26 U.S.C. section
				441. The terms "tax year" and "taxable year"
				are generally used interchangeably for Missouri income tax purposes.
(A) Example: ABC Corporation is a 52-53 Week
				Taxpayer that has a tax year ending December 28, 2024. A new Missouri income
				tax deduction is created within sections
				143.011 to
				143.996, RSMo, and the new
				deduction expressly applies to all tax years ending on or after December 31,
				2024. A new mandatory Missouri corporate income tax apportionment method is
				created, and expressly applies to all tax years ending on or after December 31,
				2024. ABC Corporation is eligible for the new deduction, and must use the new
				mandatory corporate income tax apportionment method, for its 52-53 week taxable
				year ending December 28, 2024.
(B)
				Example: XYZ Corporation is a 52-53 Week Taxpayer that has a tax year beginning
				December 29, 2024. Pursuant to a change in law, a Missouri income tax
				subtraction that XYZ Corporation previously qualified for expressly no longer
				applies for any tax year beginning on or after January 1, 2025. XYZ Corporation
				is not eligible for this tax subtraction for its 52-53 week taxable year
				beginning December 29, 2024. A new statute, which became law on August 28,
				2024, increases the corporate income tax rate by one percent (1%), and
				expressly applies to all tax years beginning on or after January 1, 2025. The
				new increased corporate income tax rate applies to the entirety of XYZ
				Corporation's tax year beginning December 29, 2024. Note that Missouri's income
				tax law contains no statute directly corresponding to
				26 U.S.C. section
				15.