Missouri tips tax calculator and $7.50 tipped wage

Missouri requires half the $15.00 minimum — $7.50 — as cash for tipped workers, and keeps tips taxable: the MO-1040 starts from federal AGI and the tips subtraction bills did not pass.

Your Missouri tips

State where you work Qualified tips this year

Voluntary cash and card tips on your W-2, 1099 or Form 4137 — not service charges.

Tax year

2025202620272028

Filing status Other income in your AGI

Wages without the tips, plus any other income (both spouses if filing jointly).

Your occupation The 71 Treasury Tipped Occupation Codes in the final rule (TD 10044).

How you are paid

Employee (W-2) Self-employed (1099)

More options

Itemized deductions (if larger than the standard deduction)

State marginal rate override (%) Leave blank to use the state’s published rate for your bracket.

Federal income tax saved in 2026Deduction $18,000 at 12% $2,160

$18,000 of the $25,000 cap used (72%)

Qualified tips	$18,000
After the $25,000 cap	$18,000
Income phase-out (MAGI $48,000)	$0
Tips deduction	$18,000
Federal tax before → after	$3,580 → $1,420
Social Security & Medicare still due on tips	$1,377
Missouri 2026: Tips stay taxable in this state	$0
Total income tax saved	$2,160

What the estimate leaves out

The bills and their price tag

HB 198 and HB 860 (2025) proposed subtracting tips from Missouri adjusted gross income beginning January 1, 2026. The Oversight Division estimated the revenue loss at roughly $798 million to $1.12 billion a year for a 100% subtraction. Neither became law, and the 2025 MO-1040 instructions contain no tips line, so Missouri taxes the tips you deduct federally.

Missouri figures

Cash wage / minimum	$7.50 / $15.00
In force	July 1, 2026 – December 31, 2026
Next change	after December 31, 2026 — not yet published
Tipped threshold	Not specified
Tips on the 2025 return	tips stay taxable in this state. The MO-1040 starts from federal AGI and the 2025 instructions list no tips subtraction. Source: Missouri Department of Revenue
Tips on the 2026 return	tips stay taxable in this state. Tips bills (HB 198, HB 860) were not enacted; we found no Missouri tips subtraction for 2026. Source: Missouri Department of Revenue

How the 50% rule works

The Department of Labor and Industrial Relations requires employers to pay tipped employees at least $7.50 an hour “plus any amount necessary to bring the employee’s total compensation to a minimum of $15.00 per hour.” The Department posts rates for the calendar year in force, and the 2027 rate was not posted when we verified.

A Kansas City server

A $18,500 federal deduction saves $2,150; Missouri taxes the tips. Thirty hours at $7.50 pay $225; adding $140 of tips leaves $85 to reach $450.

Check a Missouri workweek

Employer make-up owed$7.50 cash wage + tips must reach $15.00 an hour. $90

Minimum for the hours	$480
Cash wage paid	$240
Tips counted toward the minimum	$150
Your effective hourly pay	$15.00

How the make-up rule works

Where these figures come from

Missouri Department of Revenue · Missouri Department of Labor and Industrial Relations
2025 Form MO-1040 instructions (2025)
Minimum Wages for Tipped Employees (table by state) (2026-07-01)
Minimum Wage (2026)

Federal rules: how the deduction works. Nearby: Iowa, Illinois, Kentucky, Tennessee, Arkansas, Oklahoma, Kansas, Nebraska.

Figures verified against primary sources on October 5, 2026