Salt Parity Act (SPA) FAQs

A SPA tax credit is a Missouri income tax credit equal to a member’s pro rata share of the pass-through entity income tax paid by an affected business entity (a partnership or S corporation that elected to have its own separate income tax imposed on it at the entity level).

Individual, fiduciary, or corporate income tax members of an electing pass-through entity are eligible to receive a SPA tax credit.

The credit amount is equal to the member’s pro rata share of the pass-through entity tax paid by the affected business entity.

For a member of an S corporation, the pro rata share is the member’s current year allocation percentage on that member’s federal schedule K-1 from the S corporation for the corresponding tax year. For a member of a partnership, if there is a difference between the profit and capital percentages, the pro rata share is generally the profit percentage on that member’s federal schedule K-1 from the partnership for the corresponding tax year (assuming beginning and ending profit percentages are the same).

Attach:

• Form MO-TC;
• The member’s federal Schedule K-1 (if one was received from the pass-through entity); and
• At least one of the following, which was provided to the member by the pass-through entity:
• MO-PTE, page 4 for the corresponding tax year,
• Form 5889, or
• An equivalent report to Form 5889.

To accurately redeem the tax credit, the following information is required:

• FEIN of the affected business entity
• Member’s name, SSN, or FEIN
• Membership percentage
• Amount of the pass-through entity tax credit
• For taxpayers who are owners of grantor trusts, a grantor letter or Form K-1 that identifies the owner of the grantor trust.

The benefit number is generated after the Missouri income tax return is filed and the SPA tax credit is redeemed with the Department of Revenue.

• If the benefit number is unknown and you are not trying to carry forward a SPA tax credit that you have previously reported, use the two-digit ending month of the tax year followed by the four-digit tax year of the pass-through entity’s tax year that the tax credit originated from.
• Example: 122024 as a benefit number represents December of 2024 for a tax credit generated from a 2024 MO-PTE return.
• If the tax credit is carried forward, on the Form MO-TC use the original benefit number that was generated by the Department of Revenue. If you do not know the benefit number that was generated by the Department of Revenue and need to carry forward a SPA tax credit, please contact the Department at: taxcredit@dor.mo.gov.

No. The SPA tax credit is only claimed by individual, fiduciary, or corporate income tax members, not by another affected business entity. If one affected business entity is a member of another affected business entity, the member affected business entity is required to add its distributive share of loss or subtract its distributive share of income from the affected business entity of which it is itself a member.