Updated October 7, 2026. Quick answer: Partly. Missouri Letter Ruling 8197 says withdrawals made in retirement from the TSP are “retirement benefits received from sources other than privately funded sources” under section 143.124.5, RSMo, except any part that came from an IRA rollover. They qualify for a capped subtraction, not a full exemption: the cap is $47,633. The 2022 ruling described an AGI threshold of $85,000 for a single filer, but section 143.124.5 as archived says that for tax years beginning on or after January 1, 2024 the maximum applies regardless of filing status or Missouri AGI.
Missouri TSP withdrawal tax treatment at a glance
| Item | What the documents say |
|---|---|
| TSP withdrawals | Capped subtraction: the Department’s letter ruling treats TSP withdrawals as retirement benefits from sources other than privately funded sources |
| FERS annuity | The ruling’s applicant had both a FERS pension and a TSP component; the ruling answers only for the TSP withdrawals |
| Rate or limit printed | Cap $47,633 (2025 MO-A worksheet); the 2022 ruling’s AGI thresholds of $85,000 single and $100,000 married filing combined do not apply for tax years beginning on or after January 1, 2024 (section 143.124.5); top rate 4.7% |
| Where it is reported | Form MO-A, Part 3; carried to Form MO-1040, line 8 |
| Source | Missouri Department of Revenue; Missouri Revisor of Statutes |
What the Missouri documents say
Letter Ruling 8197, issued on June 17, 2022 by the Director of Revenue, answers whether withdrawals from the Thrift Savings Plan count under section 143.124.5, RSMo. The answer: “retirement benefits received from sources other than privately funded sources”, except for the part attributable to funds transferred from an IRA. The ruling adds that benefits paid by the plan “are not from privately funded sources”.
The subtraction is capped. The 2025 Form MO-A worksheet uses “$47,633 (maximum social security benefit)” as the maximum, and the 2022 ruling said that to get the maximum a single taxpayer needed Missouri adjusted gross income “equal to or less than the threshold of $85,000”, or $100,000 if married filing combined, with the subtraction reduced a dollar for each dollar above the threshold. Section 143.124.5 now says that for tax years beginning on or after January 1, 2024 the maximum applies “regardless of the taxpayer’s filing status or the amount of the taxpayer’s Missouri adjusted gross income”. The 2025 tax table adds the top rate: “$256 plus 4.7% of the excess over $9,191”.
A worked example at $30,000 of withdrawals
An illustration, not a return: a single Missouri resident takes $30,000 from the TSP in 2026. The amount is below the $47,633 cap, so on the ruling’s reasoning the whole $30,000 could be subtracted, leaving $0 of it taxed by Missouri. The 2022 ruling’s AGI thresholds do not apply for tax years beginning on or after January 1, 2024.
If you moved to Missouri or left it
The rules above are Missouri’s own, for a resident. Federal law limits what a state you have left may do: “No State may impose an income tax on any retirement income” of someone who is not a resident or domiciliary of that state, as 4 U.S.C. 114(a) puts it. The statute defines retirement income by reference to plans described in the Internal Revenue Code; this page does not decide whether a particular TSP payment meets that definition. If you moved during the year, check each state’s page and return. See CMG’s TSP withdrawal options and FERS, TSP and Social Security sequencing pages for the federal side.
What changes in 2026
The documents read for Missouri announce no change for 2026 that is specific to TSP withdrawals. The instructions read are for tax year 2025, the newest archived; check the state agency for the 2026 forms when they are published.
What the documents do not say
- The ruling is addressed to one applicant, binds only that applicant for three years, and uses 2022 thresholds that section 143.124.5 no longer applies for tax years beginning on or after January 1, 2024; the 2025 instructions read do not restate them. The portion from an IRA rollover is excluded.
Common mistakes
- Assuming the ruling’s 2022 AGI thresholds still apply; section 143.124.5 removes them for tax years beginning on or after January 1, 2024.
- Treating money rolled in from an IRA as part of the subtraction; the ruling excepts it.
- Assuming the answer for one state applies to another, or that the state answer changes the federal tax on the withdrawal.
Related: TSP withdrawal options, state tax on TSP withdrawals, Missouri retirement taxes, how Missouri taxes pensions, and how Missouri taxes 401(k) and IRA withdrawals.
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Answer againSources
- Letter Ruling LR 8197: Withdrawals from a Thrift Savings Plan may be Retirement Benefits from other than Privately Funded Sources: https://dor.mo.gov/rulings/show/8197
- Form MO-1040 Instructions 2025: https://dor.mo.gov/forms/MO-1040%20Instructions_2025.pdf
- Revised Statutes of Missouri, Section 143.124: https://revisor.mo.gov/main/OneSection.aspx?section=143.124
- 4 U.S.C. 114, Limitation on State income taxation of certain pension income (U.S. Code, GovInfo): https://www.govinfo.gov/content/pkg/USCODE-2023-title4/html/USCODE-2023-title4-chap4-sec114.htm
Sources: the primary documents linked above, read on October 7, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.