Missouri Pass-Through Entity Tax (PTET)

Why PTET matters in this state

Missouri enacted its SALT Parity Act under Mo. Rev. Stat. §143.436, effective for tax years ending on or after December 31, 2022. The state's individual rate has been on a declining schedule under recent tax reform — 4.7% for 2024 with continued declines scheduled — so the federal-deduction arbitrage per dollar of allocated income is smaller than in high-rate states like California (9.3%) or Minnesota (9.85%), but remains real and worth modeling for high-earner pass-through owners. Typical beneficiaries are St. Louis and Kansas City-metro professional-services partners, S-corp owners with materially Missouri-sourced K-1 income, and multi-state operators whose Missouri allocation is meaningful. Missouri implemented the regime via 12 CSR 10-2.436 (final rule September 2025), giving the program a clear current operating framework. The §143.436.9 interstate-credit provision (see below) is a meaningful planning feature for multi-state K-1 holders that few peer states match.

Election mechanics

Form MO-PTE is due by the 15th day of the 4th month following the end of the tax year (April 15 for calendar-year filers), unless an extension is approved. The election is made annually — and unlike Michigan's three-year binding or Illinois's extended-due-date irrevocability, Missouri offers genuine annual flexibility. Eligible entities are S-corps, partnerships, and LLCs taxed as either. The entity-level rate equals the highest Missouri individual rate (4.7% for 2024; verify 2026 against dor.mo.gov before electing).

Owner credit walkthrough

Members claim a refundable credit on Form 5889 equal to their pro rata share of the PTE tax paid. Multi-owner allocation is by distributive share. Notably, Mo. Rev. Stat. §143.436.9 also allows a Missouri member-level credit for substantially similar PTE tax paid to another state — meaning a Missouri-resident owner of a multi-state pass-through can capture both the Missouri PTE credit and a comparable credit for, say, an Illinois or Kansas PTE election layered on the same income. That interstate credit-stacking provision is unusual and meaningful for multi-state K-1 holders.

2026 changes

Mo. Rev. Stat. §143.436 was implemented via 12 CSR 10-2.436 (final rule September 2025), providing the current administrative framework for the SALT Parity Act. Missouri's top individual rate is on a declining trajectory under recent tax reform — re-verify the 2026 operative PTE rate against dor.mo.gov before electing, because the rate is tied by §143.436 to the highest individual rate and that rate continues to step down. A lower operative rate compresses the federal-deduction arbitrage but does not eliminate it; the picker should be re-run with the current-year rate before each annual election decision.

Composite-return interaction

Missouri PTE stacks with composite filing rather than precluding it. The precise composite-return interaction is not pinned in the manifest for this session. The §143.436.9 cross-state credit provision is the more practically important multi-state mechanic: a Missouri-resident owner with K-1 income from a Kansas or Illinois pass-through that itself paid a similar PTE tax can claim a Missouri credit for that out-of-state PTE tax — meaningful for the multi-state K-1 holder.

§199A QBI interaction

Missouri PTE reduces federal flow-through ordinary income per Notice 2020-75 by approximately 4.7% of allocated income (current rate), among the smaller QBI offsets in the verified cohort. For non-SSTB owners outside the §199A phaseout, the §199A offset against the PTE federal arbitrage is modest; for SSTB owners inside the phaseout the offset is zero and the PTE election is unambiguously favorable federally.