PURPOSE: This rule explains the proper method of determining and reporting the taxable portion of Social Security benefits in cases where both spouses have income.

1. (1) Social Security benefits which are included in federal adjusted gross income (AGI) must be allocated between spouses on the Missouri Individual Income Tax Return, Form 40. They must be allocated between spouses based on the proportionate share of gross Social Security benefits received by each spouse, multiplied by the portion of the benefits included in federal taxable income. Example: A husband receives eight thousand dollars ($8,000) in Social Security benefits and the wife receives two thousand dollars ($2,000), for total gross benefit of ten thousand dollars ($10,000). The husband’s proportionate share is eighty percent (80%) and the wife’s is twenty percent (20%). If four thousand dollars ($4,000) in benefits were included in federal taxable income, then the husband’s allocated portion on the Missouri return would be three thousand two hundred dollars ($3,200) and the wife’s portion would be eight hundred dollars ($800). This is arrived at by multiplying four thousand dollars by eighty percent ($4,000 × 80%) for the husband and four thousand dollars by twenty percent ($4,000 × 20%) for the wife. These amounts must be used in calculating the Missouri AGI of the husband and wife.

AUTHORITY sections 143.031, 143.111 and 143.181, RSMo (1994).* Original rule filed Jan. 15, 1985, effective June 13, 1985. *Original authority: 143.031 and 143.611, RSMo (1972) and 143.181, RSMo (1972), amended 1983.