Bill > HB1565

This bill modifies the Missouri Working Family Tax Credit Act by establishing a state-level earned income tax credit that is tied to the federal earned income tax credit. Specifically, the bill allows eligible taxpayers (Missouri residents with certain filing statuses who qualify for the federal earned income tax credit) to claim a tax credit initially set at 10% of their federal credit, with the potential to increase to 20% if net general revenue collections meet certain thresholds. A significant change is the bill's approach to tax credit refundability: for tax years before 2026, excess credits cannot be refunded or carried forward, but starting in 2026, the credits will become fully refundable. The Department of Revenue is required to proactively identify potentially eligible taxpayers using available data and to prepare an annual report detailing the credits' usage. The bill also directs the department to create rules for implementing the tax credit, with provisions ensuring that any rulemaking complies with existing state administrative procedures. The tax credit is designed to provide additional financial support to working families with lower to moderate incomes by supplementing the federal earned income tax credit.

https://house.mo.gov/Bill.aspx?bill=HB1565&year=2025&code=R