Missouri · Qualified Tuition Reduction
Qualified Tuition Reduction in Missouri (2026)
Employees of educational institutions can exclude tuition reductions for undergraduate education from income. Graduate reductions are tax-free if involving teaching or research. Missouri has a progressive income tax with a top rate of 4.7%, so a Missouri filer's combined marginal rate on the next dollar at $60,374 of income is about 16.7% (12% federal + 4.7% MO).
2026 savings example for Missouri
Planning estimate for a single filer earning $60,374 (Missouri median household income in LevyIO's state dataset) who removes $5,000 from taxable income. Federal tax uses the 2026 IRS brackets after the $16,100 standard deduction; MO tax uses the state brackets in LevyIO's dataset and assumes the state follows the federal treatment.
Estimated total savings
$835
Federal savings
$600
$5,065 → $4,465 · 12% bracket
MO state savings
$235
$1,900 → $1,665 · 4.7% marginal
Combined marginal rate
16.7%
≈ $167 saved per $1,000 deducted
Federal × Missouri marginal rates (2026, single)
Gross-income ranges include the federal standard deduction. The MO column is the state marginal rate at the midpoint of each range. The last column is the tax saved per $1,000 deducted at that combined rate.
| Federal bracket | Gross income (single) | MO marginal | Combined | Per $1,000 |
|---|---|---|---|---|
| 10% | $16,100 - $28,500 | 3.5% | 13.5% | $135 |
| 12% | $28,500 - $66,500 | 4.7% | 16.7% | $167 |
| 22% | $66,500 - $121,800 | 4.7% | 26.7% | $267 |
| 24% | $121,800 - $217,875 | 4.7% | 28.7% | $287 |
| 32% | $217,875 - $272,325 | 4.7% | 36.7% | $367 |
| 35% | $272,325 - $656,700 | 4.7% | 39.7% | $397 |
| 37% | Over $656,700 | 4.7% | 41.7% | $417 |
Eligibility & forms
Employees of educational institutions receiving tuition reductions
- Must be employee, spouse, or dependent of employee
- Must be at an eligible educational institution
- For graduate students, must include teaching/research duties
Federal forms: Form W-2, Form 1040
Missouri filing notes
Missouri allows a federal income tax deduction based on federal tax actually paid, so filing software may differ from this estimate. Check the 2026 withholding formula, Form MO-1040, Form MO-A, and the DOR capital gains subtraction FAQ for current filing treatment.
Common mistakes: Not understanding graduate tuition reductions may be taxable; Missing the teaching/research assistant exception; Not including spouse and dependent benefits.
Frequently asked questions
How much can the Qualified Tuition Reduction save a Missouri taxpayer in 2026?
In LevyIO's example, a single filer with $60,374 of income (the Missouri median household income in our state dataset) who removes $5,000 from taxable income saves about $600 in 2026 federal tax (12% marginal bracket) plus about $235 in Missouri tax (4.7% state marginal rate), roughly $835 combined. It is a planning estimate computed from the 2026 IRS brackets and LevyIO's MO bracket data, not a survey figure.
What is the Missouri income tax rate for 2026?
Missouri has a progressive income tax with a top rate of 4.7%. The MO standard deduction in LevyIO's dataset is $16,100 single / $32,200 married. 2026 DOR withholding formula uses indexed annual brackets to 4.7% above $9,436 and standard deductions of $16,100 single / $32,200 married. Federal income tax deduction allowed.
Who qualifies for the Qualified Tuition Reduction in Missouri?
Employees of educational institutions receiving tuition reductions. The federal rules are the same in every state; the requirements are: Must be employee, spouse, or dependent of employee; Must be at an eligible educational institution; For graduate students, must include teaching/research duties. Missouri filers should confirm on the MO return whether the state follows the federal treatment.
Which forms do I file to claim the Qualified Tuition Reduction?
Federal: Form W-2, Form 1040. Missouri: check the Missouri Department of Revenue instructions for the matching state schedule. Common mistakes: Not understanding graduate tuition reductions may be taxable; Missing the teaching/research assistant exception; Not including spouse and dependent benefits.
Qualified Tuition Reduction in other states
Sources
Reviewed 2026-09-17. Estimates are educational planning figures computed from the IRS 2026 inflation adjustments and LevyIO's state bracket dataset; they are not tax advice.