Missouri Property Tax Credit for Seniors and Income Tax for Estates and Trusts: What’s New in 2026

Missouri taxpayers will see several meaningful changes to certain state taxes beginning January 1, 2026. State income tax on income not sourced from Missouri and changes to the Missouri Property Tax Credit will have a significant impact on tax planning for 2026 and beyond. In practice, this affects how trusts time income distributions and how seniors qualify for property tax relief in 2026.

Missouri State Income Tax for Estates and Irrevocable Trusts

Previously, resident estates and irrevocable trusts were taxed on total income, regardless of the source. HB 754 removes the Missouri state income tax on non-Missouri-sourced income earned by resident estates and irrevocable trusts.

Missouri-sourced income, such as income from a rental property or business located in Missouri and owned by the trust, would still be taxed. However, a rental property in Maine or passive investment income would not be taxed for a Missouri resident trust.

Other non-resident states may still require filings and tax to be paid on that income, however. Residency and sourcing of the income should be proactively reviewed before 2026 to determine which income will qualify for this new exemption.

Please note that this law doesn’t apply to income that is distributed to a beneficiary or income that is earned in grantor or revocable trusts reported on individual returns. In those cases, the income is still taxed to the beneficiary based on their own state of residence and tax rules.

Why it Matters

Families and individuals who use trusts as part of their long-term financial planning will see a significant impact on estate planning, trust administration and financial services. The new rule could reduce their tax burden, but it’s vital to work with an advisor to ensure accuracy and compliance.

Missouri Property Tax Credit for Senior Citizens

The Missouri Property Tax Credit, not to be confused with the St. Louis County senior property tax freeze, is available to 100% disabled individuals and certain senior citizens, persons aged 65 and older. Previously, eligible taxpayers could claim an income tax credit equal to a portion of their property tax liability. The amount of the credit was dependent on the taxpayer’s income and property tax liability.

HB 594 updated the law’s definition of “income,” which increased the amount deducted from Missouri adjusted gross income from $2,000 to $2,800. Claimants who owned and occupied their residence for the entire year now qualify for a higher deduction as well, from $4,000 to $5,800.

Renters were previously able to access up to $750 in credit, which has been increased to $1,055. Those who own and occupy their home were eligible for up to $1,100, which has now been increased to $1,550.

The income limits for qualifying taxpayers have also shifted. The law previously limited the tax credit to taxpayers with an income of $27,500 or less, or $30,000 in the case of a homestead owned and occupied for the entire year by the taxpayer. HB 594 increased the maximum income to:

  • $38,200 for single filers
  • $42,200 for single filers who owned and occupied a homestead for the entire year
  • $41,100 for married filing jointly
  • $48,000 for married filing jointly who owned and occupied a homestead for the entire year

This means many moderate-income seniors who were previously phased out of the credit may now qualify or receive a larger benefit. Missouri will adjust these income thresholds annually for inflation. Use the Property Tax Credit Qualification Chart to help you determine your eligibility.

Why it Matters

Rising property taxes have historically made it difficult for seniors and other vulnerable populations to remain in their homes as they age. The changes to the Property Tax Credit expand opportunities to reduce their tax burden, helping them maintain their independence and remain in their homes.

Anders Family Wealth and Estate Planning advisors monitor local, state and federal legislation to keep clients informed and prepared. Learn how our knowledgeable advisors can help make a difference for your family and legacy, as well as the associated cost, by requesting a meeting below.

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