Following the severe storms and tornadoes that impacted many Missouri communities in 2025, the Missouri legislature created a new tax credit intended to provide relief to affected homeowners and renters. This credit, known as the Homestead Disaster Tax Credit, is designed to help offset insurance deductibles paid on disaster‑related claims involving a taxpayer’s primary residence. Eligible taxpayers may qualify for a credit of up to $5,000, and unused credits may generally be carried forward for many years if they cannot be fully used right away.

Although Missouri residents can claim the credit on their 2025 Missouri income tax return, approved credits are not currently being paid. This delay is not the result of taxpayer error or processing backlogs at the Missouri Department of Revenue. Instead, payment has been temporarily paused due to an ongoing legal challenge involving the legislation that created the credit.

This article provides a brief overview of who may qualify, how the credit works, why it can still be claimed despite the delay, and what eligible taxpayers should do now to preserve their claim.

What Is the Homestead Disaster Tax Credit?

The Homestead Disaster Tax Credit is a Missouri individual income tax credit designed to help offset insurance deductibles paid on a primary residence damaged by a qualifying disaster in 2025.

If you qualify, the credit equals the amount of your insurance deductible, up to $5,000 per taxpayer. The credit is non‑refundable, meaning it can reduce your Missouri income tax liability to zero but will not create a refund itself. However, any unused credit can generally be carried forward for up to 29 years or transferred or sold.

The credit applies only to disasters for which the Governor of Missouri requested a federal disaster declaration, which for 2025 were:

• March 14 – 15 Storms
• March 30 – April 8 Storms
• April 29 Storms
• May 16 Storms
• May 23 – 26 Storms

Who May Be Eligible?

You may be eligible for the Homestead Disaster Tax Credit if all the following apply:

• You were a Missouri resident in 2025.
• Your primary residence (owned or rented) was damaged in a qualifying 2025 disaster.
• You lived in the home for more than six months prior to the disaster.
• You filed an insurance claim and paid an insurance deductible in 2025.
• The insurance policy was issued by an insurance company licensed in Missouri.

Both homeowners and renters may qualify, provided the residence was their homestead and the insurance deductible was incurred on a claim related to the disaster.

How the Credit Is Claimed

To claim the credit, qualifying taxpayers must file their Missouri individual income tax return and include:

• Form 5926, the Homestead Disaster Tax Credit Affidavit
• Documentation from the insurance company showing the deductible paid
• Form MO‑TC, Missouri Miscellaneous Income Tax Credits

Importantly, the Missouri Department of Revenue is asking taxpayers to continue filing returns that claim the credit, even though payments are currently delayed.

Why Is the Credit Approved but Not Being Paid?

The Homestead Disaster Tax Credit was enacted as part of a broader special legislative session bill in 2025. While the credit itself was not controversial, the overall legislation is currently subject to a constitutional challenge regarding whether it violated Missouri’s single‑subject rule.

Because of this ongoing litigation, the Missouri Department of Revenue has taken a cautious approach. Rather than issue credits now and potentially have to recover funds later, the Department is allowing claims to be filed but is temporarily withholding payment until the Missouri Supreme Court resolves the case.

If the legislation is ultimately upheld, the Department has indicated it will automatically adjust affected returns and issue any resulting refunds or credits. If the law is struck down, the credit would not be paid.

What Should Taxpayers Do Now?

For taxpayers who may qualify, the best course of action is generally to:

• File your Missouri return on time
• If amending, the amended return needs to be filed by October 15, 2026
• Retain all supporting documentation
• Be prepared for a delayed benefit rather than an immediate refund

While the delay is understandably frustrating, filing now preserves your place in line and ensures your claim is documented should the credit ultimately move forward.

Final Thoughts

The Homestead Disaster Tax Credit represents a meaningful attempt by Missouri lawmakers to provide relief to residents impacted by last year’s storms. Although payment is currently on hold due to pending litigation, eligible taxpayers can and should continue to claim the credit as part of their 2025 Missouri income tax return.

As always, eligibility and benefit amounts can vary based on individual circumstances. If you believe you may qualify or have questions about how this credit applies to your situation, your Krilogy Tax Team can help you evaluate the claim and ensure it is properly documented.

This information is distributed for educational purposes only, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services. Tax services are provided under separate engagement with Krilogy Tax Services, LLC, a separate but affiliated entity to Krilogy.