diff --git a/changelog.d/mo-spouse-fagi-division.fixed.md b/changelog.d/mo-spouse-fagi-division.fixed.md
new file mode 100644
index 00000000000..e30e5bb3f04
--- /dev/null
+++ b/changelog.d/mo-spouse-fagi-division.fixed.md
@@ -0,0 +1 @@
+Divide federal adjusted gross income between spouses on a Missouri combined return the way the Form MO-1040 Line 1 worksheet and 12 CSR 10-2.010 do. Each spouse's own federal adjustments and losses stay in their own column, and capital losses follow 12 CSR 10-2.010(2). From 2024, a negative federal AGI is replaced by zero, and when joint federal AGI is positive the other spouse enters the whole joint amount (12 CSR 10-2.710). A spouse's Missouri AGI can be negative: Line 6 adds the two columns, and only the Line 7 income percentage is floored.
diff --git a/policyengine_us/parameters/gov/states/mo/tax/income/federal_agi/negative_floor_applies.yaml b/policyengine_us/parameters/gov/states/mo/tax/income/federal_agi/negative_floor_applies.yaml
new file mode 100644
index 00000000000..9bb6bf86293
--- /dev/null
+++ b/policyengine_us/parameters/gov/states/mo/tax/income/federal_agi/negative_floor_applies.yaml
@@ -0,0 +1,31 @@
+description: Missouri starts a filer's Missouri adjusted gross income from zero instead of a negative federal adjusted gross income, and gives the whole joint federal adjusted gross income to the spouse whose separate amount is positive, if this is true.
+metadata:
+  unit: bool
+  period: year
+  label: Missouri negative federal adjusted gross income floor applies
+  reference:
+    - title: 12 CSR 10-2.710(1), amended effective July 30, 2024
+      href: https://www.law.cornell.edu/regulations/missouri/12-CSR-10-2-710
+    - title: 12 CSR 10-2.010(5), amended effective April 30, 2026
+      href: https://dor.mo.gov/resources/official-final-rules/documents/12_CSR_10-2_010_Income_Tax_of_Current_or_Former_Spouses.pdf#page=4
+    - title: 2025 MO-1040 Book - Individual Income Tax Long Form, Negative Federal Adjusted Gross Income
+      href: https://dor.mo.gov/forms/MO-1040%20Instructions_2025.pdf#page=6
+    - title: 2024 MO-1040 Book - Individual Income Tax Long Form, Line 1
+      href: https://dor.mo.gov/forms/MO-1040%20Instructions_2024.pdf#page=6
+    - title: 2023 MO-1040 Book - Individual Income Tax Long Form, Line 7 note on negative income
+      href: https://dor.mo.gov/forms/MO-1040%20Instructions_2023.pdf#page=7
+
+values:
+  # Through 2023 a spouse's column on the combined return could be negative:
+  # the 2023 instructions' Line 7 note covers "one spouse has negative income".
+  2019-01-01: false
+  # The 2024 instructions are the first to say "If the amount you would
+  # otherwise report as your federal adjusted gross income would be a negative
+  # number, enter $0 on Line 1", without saying how a combined return applies
+  # it. The 2025 instructions apply the same 12 CSR 10-2.710(1) to combined
+  # returns: both spouses enter $0 when joint federal AGI is negative, and when
+  # it is positive the spouse with a negative separate amount enters $0 and the
+  # other spouse enters the whole joint amount. That reading also keeps the 2024
+  # worksheet's rule that the two columns add up to joint federal AGI, so it is
+  # applied from 2024.
+  2024-01-01: true
diff --git a/policyengine_us/parameters/gov/states/mo/tax/income/subtractions/plan_529_contributions/limited_to_own_agi.yaml b/policyengine_us/parameters/gov/states/mo/tax/income/subtractions/plan_529_contributions/limited_to_own_agi.yaml
new file mode 100644
index 00000000000..2aac3769288
--- /dev/null
+++ b/policyengine_us/parameters/gov/states/mo/tax/income/subtractions/plan_529_contributions/limited_to_own_agi.yaml
@@ -0,0 +1,22 @@
+description: Missouri limits each filer's 529 plan contribution subtraction to their Missouri adjusted gross income before it, if this is true.
+metadata:
+  unit: bool
+  period: year
+  label: Missouri 529 plan contribution subtraction limited to the filer's Missouri adjusted gross income
+  reference:
+    - title: 12 CSR 10-2.010(4)(A)3, amended effective February 29, 2024
+      href: https://dor.mo.gov/resources/official-final-rules/documents/12_CSR_10-2_010.pdf#page=5
+    - title: 12 CSR 10-2.010(4)(A)2, amended effective April 30, 2026
+      href: https://dor.mo.gov/resources/official-final-rules/documents/12_CSR_10-2_010_Income_Tax_of_Current_or_Former_Spouses.pdf#page=4
+
+values:
+  # The 2019 version of 12 CSR 10-2.010 covers only capital losses, and RSMo
+  # 166.435 sets no limit beyond the dollar cap.
+  2019-01-01: false
+  # The version effective February 29, 2024 gives a spouse with $1,000 of
+  # federal AGI and a $5,000 MOST contribution a Missouri AGI of zero "because
+  # the MOST subtraction is limited to the spouse's Missouri adjusted gross
+  # income". It governs the 2024 and 2025 returns.
+  2024-01-01: true
+  # The version effective April 30, 2026 gives the same spouse -$4,000.
+  2026-01-01: false
diff --git a/policyengine_us/tests/core/test_mo_combined_return_federal_agi_properties.py b/policyengine_us/tests/core/test_mo_combined_return_federal_agi_properties.py
new file mode 100644
index 00000000000..3a3faf6bd4e
--- /dev/null
+++ b/policyengine_us/tests/core/test_mo_combined_return_federal_agi_properties.py
@@ -0,0 +1,351 @@
+"""Properties of Missouri's division of federal AGI between spouses.
+
+Form MO-1040 Line 1 splits a couple's joint federal AGI between their two
+columns with the Line 1 worksheet: each spouse's own income or loss, less
+their own federal adjustments, and the columns add up to joint federal AGI
+(2023 instructions, pages 6-7). 12 CSR 10-2.010(2) gives the deductible
+excess of capital losses to "the spouse responsible for the excess", pro rata
+when both are. From 2024 a negative amount is replaced by zero: when joint
+federal AGI is zero or less both columns are zero, and when it is positive a
+spouse with a negative separate amount enters zero and the other spouse the
+whole joint amount (2025 instructions, page 6; 12 CSR 10-2.710(1); 12 CSR
+10-2.010(5)). Line 5 subtracts each spouse's Missouri subtractions without a
+floor, Line 6 adds the columns, and the Line 7 income percentage gives a
+negative column 0%.
+
+The YAML cases pin the published examples. This test checks what YAML cannot,
+for every drawn couple, and for each couple both ways round: as drawn and with
+the head and spouse labels exchanged. Hypothesis draws batches of Missouri
+tax units (single filers and married couples filing jointly) with wages,
+self-employment and rental income or losses, short- and long-term capital
+gains or losses, and the spouse's own IRA, educator, early withdrawal,
+alimony and health savings account deductions, U.S. obligation interest and
+529 contributions. A seeded population adds breadth in one year of each
+regime. Each batch is one vectorized simulation.
+
+1. Accounting: the filers' Line 1 amounts add up to federal AGI through 2023,
+   and to federal AGI floored at zero from 2024. A dependent's is zero.
+2. Differential: each filer's Line 1 equals an independent numpy statement of
+   the worksheet built from the inputs, with the 12 CSR 10-2.010(2)
+   capital-loss rule and, from 2024, the negative-AGI rule. Line 5 equals
+   Line 1 less the person's subtractions, with the MOST subtraction limited to
+   what is left in 2024 and 2025 (12 CSR 10-2.010(4)(A)3 as effective
+   February 29, 2024).
+3. Labels: exchanging the head and spouse labels changes no person's Line 1,
+   Line 5 or Missouri taxable income, and no tax unit's Missouri income tax.
+4. Line 7: no one's Missouri taxable income is negative; a person whose Line
+   5 is zero or less has none; the couple's taxable income is at most Line 6
+   floored at zero; and when both columns are positive it is split in the
+   ratio of the columns.
+"""
+
+import numpy as np
+import pytest
+from hypothesis import HealthCheck, given, settings
+from hypothesis import strategies as st
+
+from policyengine_us import Simulation
+
+TOLERANCE = 0.05  # dollars; values are stored in float32
+CAPITAL_LOSS_LIMIT = 3_000  # 26 U.S.C. 1211(b)(1), joint return
+
+PERSON_INPUTS = [
+    "employment_income",
+    "self_employment_income",
+    "rental_income",
+    "short_term_capital_gains",
+    "long_term_capital_gains",
+    "traditional_ira_contributions",
+    "educator_expense",
+    "early_withdrawal_penalty",
+    "alimony_expense",
+    "health_savings_account_ald_person",
+    "us_govt_interest_person",
+    "investment_in_529_plan_indv",
+]
+
+
+def money(low, high):
+    return st.integers(low, high).map(float)
+
+
+def maybe(strategy):
+    return st.one_of(st.just(0.0), strategy)
+
+
+@st.composite
+def person_amounts(draw):
+    return {
+        "employment_income": draw(maybe(money(1, 120_000))),
+        "self_employment_income": draw(maybe(money(-60_000, 60_000))),
+        "rental_income": draw(maybe(money(-20_000, 20_000))),
+        "short_term_capital_gains": draw(maybe(money(-10_000, 10_000))),
+        "long_term_capital_gains": draw(maybe(money(-20_000, 30_000))),
+        "traditional_ira_contributions": draw(maybe(money(1, 7_000))),
+        # The $300 educator expense cap applies per educator.
+        "educator_expense": draw(maybe(money(1, 300))),
+        "early_withdrawal_penalty": draw(maybe(money(1, 500))),
+        # Alimony under a pre-2019 decree is deductible.
+        "alimony_expense": draw(maybe(money(1, 15_000))),
+        "health_savings_account_ald_person": draw(maybe(money(1, 4_000))),
+        "us_govt_interest_person": draw(maybe(money(1, 5_000))),
+        # Up to $8,000 each, so a couple stays within the $16,000 cap.
+        "investment_in_529_plan_indv": draw(maybe(money(1, 8_000))),
+    }
+
+
+@st.composite
+def tax_units(draw):
+    joint = draw(st.booleans())
+    return {
+        "head": draw(person_amounts()),
+        "spouse": draw(person_amounts()) if joint else None,
+    }
+
+
+SEED = 20261008
+
+
+def _seeded_units(n=150):
+    rng = np.random.default_rng(SEED)
+
+    def some(low, high, p):
+        return float(rng.integers(low, high + 1)) if rng.random() < p else 0.0
+
+    def amounts():
+        return {
+            "employment_income": some(1, 120_000, 0.7),
+            "self_employment_income": some(-60_000, 60_000, 0.4),
+            "rental_income": some(-20_000, 20_000, 0.2),
+            "short_term_capital_gains": some(-10_000, 10_000, 0.25),
+            "long_term_capital_gains": some(-20_000, 30_000, 0.3),
+            "traditional_ira_contributions": some(1, 7_000, 0.3),
+            "educator_expense": some(1, 300, 0.2),
+            "early_withdrawal_penalty": some(1, 500, 0.1),
+            "alimony_expense": some(1, 15_000, 0.1),
+            "health_savings_account_ald_person": some(1, 4_000, 0.2),
+            "us_govt_interest_person": some(1, 5_000, 0.15),
+            "investment_in_529_plan_indv": some(1, 8_000, 0.15),
+        }
+
+    return [
+        {"head": amounts(), "spouse": amounts() if rng.random() < 0.8 else None}
+        for _ in range(n)
+    ]
+
+
+HEAD = dict(is_tax_unit_head=True, is_tax_unit_spouse=False)
+SPOUSE = dict(is_tax_unit_head=False, is_tax_unit_spouse=True)
+
+
+def _person(amounts, role):
+    return {
+        "age": 45,
+        **role,
+        **amounts,
+        # U.S. obligation interest is part of taxable interest.
+        "taxable_interest_income": amounts["us_govt_interest_person"],
+        "divorce_year": 2015,
+    }
+
+
+def _situation(units, year):
+    """Each unit twice: as drawn, then with the labels exchanged.
+
+    People are listed in the same order in both copies, so person k of copy
+    one is the same drawn person as person k of copy two.
+    """
+    people = {}
+    groups = {"tax_units": {}, "marital_units": {}, "households": {}}
+    for copy in (0, 1):
+        for i, u in enumerate(units):
+            a, b = f"a_{copy}_{i}", f"b_{copy}_{i}"
+            members = [a]
+            if u["spouse"] is None:
+                people[a] = _person(u["head"], HEAD)
+            else:
+                first, second = (HEAD, SPOUSE) if copy == 0 else (SPOUSE, HEAD)
+                people[a] = _person(u["head"], first)
+                people[b] = _person(u["spouse"], second)
+                members.append(b)
+            hsa = sum(people[m]["health_savings_account_ald_person"] for m in members)
+            name = f"{copy}_{i}"
+            groups["tax_units"][name] = {
+                "members": members,
+                "health_savings_account_ald": hsa,
+            }
+            groups["marital_units"][name] = {"members": members}
+            groups["households"][name] = {"members": members, "state_code": "MO"}
+
+    def by_year(values):
+        return {k: (v if k == "members" else {year: v}) for k, v in values.items()}
+
+    return {
+        "people": {name: by_year(values) for name, values in people.items()},
+        **{
+            plural: {name: by_year(values) for name, values in entities.items()}
+            for plural, entities in groups.items()
+        },
+    }
+
+
+PERSON_OUTPUTS = [
+    "mo_federal_adjusted_gross_income",
+    "mo_adjusted_gross_income",
+    "mo_taxable_income",
+    "mo_agi_subtractions",
+    "mo_529_deduction",
+    "self_employment_tax_ald_person",
+    "is_tax_unit_dependent",
+]
+
+
+def _run(units, year):
+    sim = Simulation(situation=_situation(units, year))
+    person = {
+        name: np.asarray(sim.calculate(name, year), dtype=float)
+        for name in PERSON_OUTPUTS + PERSON_INPUTS
+    }
+    person["unit"] = sim.populations["tax_unit"].members_entity_id
+    unit = {
+        name: np.asarray(sim.calculate(name, year), dtype=float)
+        for name in ["adjusted_gross_income", "mo_income_tax"]
+    }
+    return person, unit
+
+
+def _unit_sum(person, values, n):
+    return np.bincount(person["unit"], weights=values, minlength=n)
+
+
+def _reference_line_1(person, n, floor_applies):
+    """Line 1 from the worksheet: each spouse's own income or loss less their
+    own adjustments, with 12 CSR 10-2.010(2) for a net capital loss."""
+    own = (
+        person["employment_income"]
+        + person["self_employment_income"]
+        + person["rental_income"]
+        + person["us_govt_interest_person"]
+        - person["self_employment_tax_ald_person"]
+        - person["traditional_ira_contributions"]
+        - person["educator_expense"]
+        - person["early_withdrawal_penalty"]
+        - person["alimony_expense"]
+        - person["health_savings_account_ald_person"]
+    )
+    short = person["short_term_capital_gains"]
+    long = person["long_term_capital_gains"]
+    net = _unit_sum(person, short + long, n)[person["unit"]]
+    # Each character's net loss, attributed to the spouses with losses of
+    # that character (Example No. 2).
+    responsibility = 0.0
+    for amount in (short, long):
+        character_net = _unit_sum(person, amount, n)[person["unit"]]
+        own_loss = np.maximum(0, -amount)
+        unit_loss = _unit_sum(person, own_loss, n)[person["unit"]]
+        share = np.divide(
+            own_loss, unit_loss, out=np.zeros_like(own_loss), where=unit_loss > 0
+        )
+        responsibility = responsibility + np.maximum(0, -character_net) * share
+    unit_responsibility = _unit_sum(person, responsibility, n)[person["unit"]]
+    loss_share = np.divide(
+        responsibility,
+        unit_responsibility,
+        out=np.zeros_like(responsibility),
+        where=unit_responsibility > 0,
+    )
+    deductible_loss = np.minimum(CAPITAL_LOSS_LIMIT, np.maximum(0, -net))
+    # With a net gain each spouse's own gain or loss is in their column; with
+    # a net loss the gains drop out and each takes their share of the
+    # deductible loss.
+    capital = np.where(net >= 0, short + long, -deductible_loss * loss_share)
+    separate = own + capital
+    if not floor_applies:
+        return separate
+    joint = _unit_sum(person, separate, n)[person["unit"]]
+    has_negative = _unit_sum(person, (separate < 0).astype(float), n)[person["unit"]]
+    line_1 = np.where(separate < 0, 0, np.where(has_negative > 0, joint, separate))
+    return np.where(joint > 0, line_1, 0)
+
+
+def _check(units, year):
+    person, unit = _run(units, year)
+    n = len(unit["adjusted_gross_income"])
+    line_1 = person["mo_federal_adjusted_gross_income"]
+    line_5 = person["mo_adjusted_gross_income"]
+    taxable = person["mo_taxable_income"]
+    # The years come from the sources, not from the model's parameters:
+    # 12 CSR 10-2.710(1) and the 2024 and 2025 instructions from 2024, and
+    # the MOST limit under the 12 CSR 10-2.010 version effective February 29,
+    # 2024 for 2024 and 2025.
+    floor_applies = year >= 2024
+    most_limited = 2024 <= year <= 2025
+
+    # 1. Accounting.
+    agi = unit["adjusted_gross_income"]
+    expected_total = np.maximum(0, agi) if floor_applies else agi
+    np.testing.assert_allclose(
+        _unit_sum(person, line_1, n), expected_total, atol=TOLERANCE
+    )
+    assert (line_1[person["is_tax_unit_dependent"] > 0] == 0).all()
+
+    # 2. Differential against the worksheet.
+    np.testing.assert_allclose(
+        line_1, _reference_line_1(person, n, floor_applies), atol=TOLERANCE
+    )
+    most = person["mo_529_deduction"]
+    other = person["mo_agi_subtractions"] - most
+    if most_limited:
+        most = np.minimum(most, np.maximum(0, line_1 - other))
+    np.testing.assert_allclose(line_5, line_1 - other - most, atol=TOLERANCE)
+
+    # 3. Labels: the second half of the people and tax units is the first
+    # half with the labels exchanged.
+    half_people, half_units = len(line_1) // 2, n // 2
+    for values in (line_1, line_5, taxable):
+        np.testing.assert_allclose(
+            values[:half_people], values[half_people:], atol=TOLERANCE
+        )
+    tax = unit["mo_income_tax"]
+    np.testing.assert_allclose(tax[:half_units], tax[half_units:], atol=TOLERANCE)
+
+    # 4. Line 7.
+    assert (taxable >= -TOLERANCE).all()
+    assert (np.abs(taxable[line_5 <= 0]) <= TOLERANCE).all()
+    line_6 = _unit_sum(person, line_5, n)
+    assert (_unit_sum(person, taxable, n) <= np.maximum(0, line_6) + TOLERANCE).all()
+    other_line_5 = _unit_sum(person, line_5, n)[person["unit"]] - line_5
+    other_taxable = _unit_sum(person, taxable, n)[person["unit"]] - taxable
+    both_positive = (line_5 > 0) & (other_line_5 > 0)
+    np.testing.assert_allclose(
+        (taxable * other_line_5)[both_positive],
+        (other_taxable * line_5)[both_positive],
+        rtol=1e-4,
+        atol=1.0,
+    )
+
+
+# Each example is one vectorized batch of tax units, so a few examples cover
+# many units; the seeded population runs once per year.
+SETTINGS = dict(
+    max_examples=3,
+    deadline=None,
+    derandomize=True,
+    suppress_health_check=[HealthCheck.too_slow, HealthCheck.data_too_large],
+)
+
+
+@settings(**SETTINGS)
+@given(
+    st.lists(tax_units(), min_size=10, max_size=40),
+    st.sampled_from([2022, 2024, 2025, 2026]),
+)
+def test_mo_federal_agi_division_properties(units, year):
+    _check(units, year)
+
+
+# One year in each regime: columns may be negative (2023); the negative-AGI
+# rule with the MOST limit (2025); the negative-AGI rule without it (2026).
+@pytest.mark.parametrize("year", [2023, 2025, 2026])
+def test_seeded_population(year):
+    _check(_seeded_units(), year)
diff --git a/policyengine_us/tests/policy/baseline/gov/states/mo/tax/income/adjusted_gross_income/mo_adjusted_gross_income.yaml b/policyengine_us/tests/policy/baseline/gov/states/mo/tax/income/adjusted_gross_income/mo_adjusted_gross_income.yaml
index 4a0f71ad81f..d9c22af1764 100644
--- a/policyengine_us/tests/policy/baseline/gov/states/mo/tax/income/adjusted_gross_income/mo_adjusted_gross_income.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/states/mo/tax/income/adjusted_gross_income/mo_adjusted_gross_income.yaml
@@ -46,7 +46,9 @@
     mo_qualified_health_insurance_premiums: 3_000
     state_code: MO
   output:
-    mo_adjusted_gross_income: 0  # AGI cannot be negative
+    # Form MO-1040 Line 5, "Subtract Line 4 from Line 3", has no floor; the
+    # floor is on the joint subtotal, Line 26.
+    mo_adjusted_gross_income: -1_000
 
 - name: Dependent's self-employment tax deduction neither reduces nor raises the parent's Missouri AGI
   period: 2025
@@ -75,3 +77,186 @@
     # -706.48.
     adjusted_gross_income: 40_000
     mo_adjusted_gross_income: [40_000, 0]
+
+- name: 12 CSR 10-2.010(4)(A)2, a spouse's subtraction for U.S. obligation interest exceeds their federal AGI
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    people:
+      spouse_1:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 38_000
+      spouse_2:
+        age: 40
+        is_tax_unit_spouse: true
+        taxable_interest_income: 5_000
+        us_govt_interest_person: 5_000
+        self_employment_income: -4_000
+    tax_units:
+      tax_unit:
+        members: [spouse_1, spouse_2]
+    marital_units:
+      marital_unit:
+        members: [spouse_1, spouse_2]
+    households:
+      household:
+        members: [spouse_1, spouse_2]
+        state_code: MO
+  output:
+    # Spouse 2's federal AGI is 1,000 (5,000 of interest less a 4,000
+    # business loss) and the U.S. obligation interest subtraction is 5,000.
+    # Regulation (effective February 29, 2024): "The combined Missouri
+    # adjusted gross income equals thirty-four thousand dollars ($34,000)
+    # (thirty-eight thousand dollars ($38,000) plus negative four thousand
+    # dollars (-$4,000))." (main floored spouse 2 at 0 and split the loss by
+    # gross income share: 34,465.12 and 0.)
+    mo_adjusted_gross_income: [38_000, -4_000]
+
+- name: 12 CSR 10-2.010(4)(A)3, the MOST subtraction is limited to the spouse's Missouri AGI in 2024
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    people:
+      spouse_1:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 38_000
+      spouse_2:
+        age: 40
+        is_tax_unit_spouse: true
+        employment_income: 1_000
+        investment_in_529_plan_indv: 5_000
+    tax_units:
+      tax_unit:
+        members: [spouse_1, spouse_2]
+    marital_units:
+      marital_unit:
+        members: [spouse_1, spouse_2]
+    households:
+      household:
+        members: [spouse_1, spouse_2]
+        state_code: MO
+  output:
+    # Regulation (effective February 29, 2024): "thirty-eight thousand
+    # dollars ($38,000) plus zero ... because the MOST subtraction is limited
+    # to the spouse's Missouri adjusted gross income."
+    mo_adjusted_gross_income: [38_000, 0]
+
+- name: The MOST limit also applies in 2025
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      spouse_1:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 38_000
+      spouse_2:
+        age: 40
+        is_tax_unit_spouse: true
+        employment_income: 1_000
+        investment_in_529_plan_indv: 5_000
+    tax_units:
+      tax_unit:
+        members: [spouse_1, spouse_2]
+    marital_units:
+      marital_unit:
+        members: [spouse_1, spouse_2]
+    households:
+      household:
+        members: [spouse_1, spouse_2]
+        state_code: MO
+  output:
+    mo_adjusted_gross_income: [38_000, 0]
+
+- name: 12 CSR 10-2.010(4)(A)2 as amended effective April 30, 2026, the MOST subtraction is not limited
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      spouse_1:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 38_000
+      spouse_2:
+        age: 40
+        is_tax_unit_spouse: true
+        employment_income: 1_000
+        investment_in_529_plan_indv: 5_000
+    tax_units:
+      tax_unit:
+        members: [spouse_1, spouse_2]
+    marital_units:
+      marital_unit:
+        members: [spouse_1, spouse_2]
+    households:
+      household:
+        members: [spouse_1, spouse_2]
+        state_code: MO
+  output:
+    # Regulation (effective April 30, 2026): "thirty-eight thousand dollars
+    # ($38,000) plus negative four thousand dollars (-$4,000)".
+    mo_adjusted_gross_income: [38_000, -4_000]
+
+- name: Before 2024 the MOST subtraction is not limited
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    people:
+      spouse_1:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 38_000
+      spouse_2:
+        age: 40
+        is_tax_unit_spouse: true
+        employment_income: 1_000
+        investment_in_529_plan_indv: 5_000
+    tax_units:
+      tax_unit:
+        members: [spouse_1, spouse_2]
+    marital_units:
+      marital_unit:
+        members: [spouse_1, spouse_2]
+    households:
+      household:
+        members: [spouse_1, spouse_2]
+        state_code: MO
+  output:
+    # The 2019 version of 12 CSR 10-2.010 covers only capital losses, and
+    # RSMo 166.435 caps the subtraction only by dollar amount.
+    mo_adjusted_gross_income: [38_000, -4_000]
+
+- name: A negative federal AGI column is replaced by zero before subtractions from 2024
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      spouse_1:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 5_000
+        self_employment_income: -15_000
+        us_govt_interest_person: 1_000
+        taxable_interest_income: 1_000
+      spouse_2:
+        age: 40
+        is_tax_unit_spouse: true
+        employment_income: 100_000
+    tax_units:
+      tax_unit:
+        members: [spouse_1, spouse_2]
+    marital_units:
+      marital_unit:
+        members: [spouse_1, spouse_2]
+    households:
+      household:
+        members: [spouse_1, spouse_2]
+        state_code: MO
+  output:
+    # Spouse 1's separate federal AGI is 6,000 - 15,000 = -9,000, so Line 1
+    # is 0 for spouse 1 and the joint 91,000 for spouse 2 (2025 instructions,
+    # page 6). Spouse 1's Line 5 is 0 - 1,000 = -1,000.
+    mo_federal_adjusted_gross_income: [0, 91_000]
+    mo_adjusted_gross_income: [-1_000, 91_000]
diff --git a/policyengine_us/tests/policy/baseline/gov/states/mo/tax/income/adjusted_gross_income/mo_federal_adjusted_gross_income.yaml b/policyengine_us/tests/policy/baseline/gov/states/mo/tax/income/adjusted_gross_income/mo_federal_adjusted_gross_income.yaml
new file mode 100644
index 00000000000..7d96b23dd1b
--- /dev/null
+++ b/policyengine_us/tests/policy/baseline/gov/states/mo/tax/income/adjusted_gross_income/mo_federal_adjusted_gross_income.yaml
@@ -0,0 +1,549 @@
+# Form MO-1040 Line 1 for each filer. On a combined return the Line 1
+# worksheet puts each spouse's own income, losses and federal adjustments in
+# their column, and the columns add up to joint federal AGI (2023
+# instructions, pages 6-7). From 2024 a negative amount is replaced by zero:
+# 12 CSR 10-2.710(1), the 2025 instructions' Negative Federal Adjusted Gross
+# Income table (page 6) and 12 CSR 10-2.010(5).
+
+- name: Single filer with negative federal AGI keeps it through 2023
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    people:
+      filer:
+        age: 40
+        self_employment_income: -12_000
+    tax_units:
+      tax_unit:
+        members: [filer]
+    households:
+      household:
+        members: [filer]
+        state_code: MO
+  output:
+    adjusted_gross_income: -12_000
+    mo_federal_adjusted_gross_income: -12_000
+
+- name: Single filer with negative federal AGI enters zero from 2024
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    people:
+      filer:
+        age: 40
+        self_employment_income: -12_000
+    tax_units:
+      tax_unit:
+        members: [filer]
+    households:
+      household:
+        members: [filer]
+        state_code: MO
+  output:
+    # 2024 instructions, Line 1: "If the amount you would otherwise report as
+    # your federal adjusted gross income would be a negative number, enter $0
+    # on Line 1."
+    adjusted_gross_income: -12_000
+    mo_federal_adjusted_gross_income: 0
+
+- name: Combined return through 2023, one spouse's column negative
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    people:
+      primary:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 5_000
+        self_employment_income: -15_000
+      secondary:
+        age: 40
+        is_tax_unit_spouse: true
+        employment_income: 100_000
+    tax_units:
+      tax_unit:
+        members: [primary, secondary]
+    marital_units:
+      marital_unit:
+        members: [primary, secondary]
+    households:
+      household:
+        members: [primary, secondary]
+        state_code: MO
+  output:
+    # Primary: 5,000 of wages and a 15,000 business loss = -10,000.
+    # Secondary: 100,000. The columns add up to joint federal AGI, 90,000.
+    # (main split the loss by gross income share: 4,285.71 and 85,714.29.)
+    adjusted_gross_income: 90_000
+    mo_federal_adjusted_gross_income: [-10_000, 100_000]
+
+- name: 2025 table row 1, joint federal AGI 90,000 = (10,000) + 100,000
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      primary:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 5_000
+        self_employment_income: -15_000
+      secondary:
+        age: 40
+        is_tax_unit_spouse: true
+        employment_income: 100_000
+    tax_units:
+      tax_unit:
+        members: [primary, secondary]
+    marital_units:
+      marital_unit:
+        members: [primary, secondary]
+    households:
+      household:
+        members: [primary, secondary]
+        state_code: MO
+  output:
+    # Table: Line 1Y (primary) $0.00, Line 1S (secondary) $90,000.
+    adjusted_gross_income: 90_000
+    mo_federal_adjusted_gross_income: [0, 90_000]
+
+- name: 2025 table row 1 with the head and spouse labels exchanged
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      primary:
+        age: 40
+        is_tax_unit_spouse: true
+        employment_income: 5_000
+        self_employment_income: -15_000
+      secondary:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 100_000
+    tax_units:
+      tax_unit:
+        members: [primary, secondary]
+    marital_units:
+      marital_unit:
+        members: [primary, secondary]
+    households:
+      household:
+        members: [primary, secondary]
+        state_code: MO
+  output:
+    adjusted_gross_income: 90_000
+    mo_federal_adjusted_gross_income: [0, 90_000]
+
+- name: 2024 applies the same rule to a combined return
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    people:
+      primary:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 5_000
+        self_employment_income: -15_000
+      secondary:
+        age: 40
+        is_tax_unit_spouse: true
+        employment_income: 100_000
+    tax_units:
+      tax_unit:
+        members: [primary, secondary]
+    marital_units:
+      marital_unit:
+        members: [primary, secondary]
+    households:
+      household:
+        members: [primary, secondary]
+        state_code: MO
+  output:
+    # The 2024 instructions say only "enter $0 on Line 1". Giving the
+    # secondary spouse the whole 90,000 keeps the worksheet's rule that the
+    # columns add up to joint federal AGI, as the 2025 instructions do under
+    # the same 12 CSR 10-2.710(1).
+    mo_federal_adjusted_gross_income: [0, 90_000]
+
+- name: 2025 table row 2, joint federal AGI (50,000) = 200,000 + (250,000)
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      primary:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 200_000
+      secondary:
+        age: 40
+        is_tax_unit_spouse: true
+        self_employment_income: -250_000
+    tax_units:
+      tax_unit:
+        members: [primary, secondary]
+    marital_units:
+      marital_unit:
+        members: [primary, secondary]
+    households:
+      household:
+        members: [primary, secondary]
+        state_code: MO
+  output:
+    # Table: $0.00 and $0.00.
+    adjusted_gross_income: -50_000
+    mo_federal_adjusted_gross_income: [0, 0]
+
+- name: The same couple through 2023 keeps both columns
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    people:
+      primary:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 200_000
+      secondary:
+        age: 40
+        is_tax_unit_spouse: true
+        self_employment_income: -250_000
+    tax_units:
+      tax_unit:
+        members: [primary, secondary]
+    marital_units:
+      marital_unit:
+        members: [primary, secondary]
+    households:
+      household:
+        members: [primary, secondary]
+        state_code: MO
+  output:
+    mo_federal_adjusted_gross_income: [200_000, -250_000]
+
+- name: 2025 table row 3, joint federal AGI (17,000) = (53,000) + 36,000
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      primary:
+        age: 40
+        is_tax_unit_head: true
+        self_employment_income: -53_000
+      secondary:
+        age: 40
+        is_tax_unit_spouse: true
+        employment_income: 36_000
+    tax_units:
+      tax_unit:
+        members: [primary, secondary]
+    marital_units:
+      marital_unit:
+        members: [primary, secondary]
+    households:
+      household:
+        members: [primary, secondary]
+        state_code: MO
+  output:
+    # Table: $0.00 and $0.00.
+    adjusted_gross_income: -17_000
+    mo_federal_adjusted_gross_income: [0, 0]
+
+- name: 2025 table row 4, joint federal AGI (24,000) = (14,000) + (10,000)
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      primary:
+        age: 40
+        is_tax_unit_head: true
+        self_employment_income: -14_000
+      secondary:
+        age: 40
+        is_tax_unit_spouse: true
+        self_employment_income: -10_000
+    tax_units:
+      tax_unit:
+        members: [primary, secondary]
+    marital_units:
+      marital_unit:
+        members: [primary, secondary]
+    households:
+      household:
+        members: [primary, secondary]
+        state_code: MO
+  output:
+    # Table: $0.00 and $0.00.
+    adjusted_gross_income: -24_000
+    mo_federal_adjusted_gross_income: [0, 0]
+
+- name: Each spouse's IRA, student loan interest and educator expenses stay in their column
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    people:
+      primary:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 40_000
+        traditional_ira_contributions: 7_000
+        student_loan_interest: 2_500
+        educator_expense: 300
+      secondary:
+        age: 40
+        is_tax_unit_spouse: true
+        employment_income: 8_000
+    tax_units:
+      tax_unit:
+        members: [primary, secondary]
+    marital_units:
+      marital_unit:
+        members: [primary, secondary]
+    households:
+      household:
+        members: [primary, secondary]
+        state_code: MO
+  output:
+    # Primary: 40,000 - 7,000 - 2,500 - 300 = 30,200. Secondary: 8,000.
+    # (main split the 9,800 by gross income share: 31,833.33 and 6,366.67.)
+    adjusted_gross_income: 38_200
+    mo_federal_adjusted_gross_income: [30_200, 8_000]
+
+- name: Alimony paid under a 2015 decree stays with the payer
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    people:
+      primary:
+        age: 50
+        is_tax_unit_head: true
+        employment_income: 60_000
+        alimony_expense: 12_000
+        divorce_year: 2015
+      secondary:
+        age: 50
+        is_tax_unit_spouse: true
+        employment_income: 20_000
+    tax_units:
+      tax_unit:
+        members: [primary, secondary]
+    marital_units:
+      marital_unit:
+        members: [primary, secondary]
+    households:
+      household:
+        members: [primary, secondary]
+        state_code: MO
+  output:
+    # Primary: 60,000 - 12,000 = 48,000. Secondary: 20,000.
+    adjusted_gross_income: 68_000
+    mo_federal_adjusted_gross_income: [48_000, 20_000]
+
+- name: A health savings account deduction goes to the account holder
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      primary:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 40_000
+      secondary:
+        age: 40
+        is_tax_unit_spouse: true
+        employment_income: 20_000
+        health_savings_account_ald_person: 4_000
+    tax_units:
+      tax_unit:
+        members: [primary, secondary]
+        health_savings_account_ald: 4_000
+    marital_units:
+      marital_unit:
+        members: [primary, secondary]
+    households:
+      household:
+        members: [primary, secondary]
+        state_code: MO
+  output:
+    adjusted_gross_income: 56_000
+    mo_federal_adjusted_gross_income: [40_000, 16_000]
+
+- name: A health savings account deduction recorded only for the tax unit is divided equally
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      primary:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 40_000
+      secondary:
+        age: 40
+        is_tax_unit_spouse: true
+        employment_income: 20_000
+    tax_units:
+      tax_unit:
+        members: [primary, secondary]
+        health_savings_account_ald: 4_000
+    marital_units:
+      marital_unit:
+        members: [primary, secondary]
+    households:
+      household:
+        members: [primary, secondary]
+        state_code: MO
+  output:
+    # 26 U.S.C. 223(b)(5) divides a married couple's limit equally unless
+    # they agree otherwise: 2,000 each.
+    mo_federal_adjusted_gross_income: [38_000, 18_000]
+
+- name: 12 CSR 10-2.010(2) Example No. 1, both spouses responsible for the excess capital loss
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    people:
+      spouse_1:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 10_000
+        long_term_capital_gains: -2_000
+      spouse_2:
+        age: 40
+        is_tax_unit_spouse: true
+        employment_income: 5_000
+        long_term_capital_gains: -3_000
+    tax_units:
+      tax_unit:
+        members: [spouse_1, spouse_2]
+    marital_units:
+      marital_unit:
+        members: [spouse_1, spouse_2]
+    households:
+      household:
+        members: [spouse_1, spouse_2]
+        state_code: MO
+  output:
+    # The $3,000 Section 1211 deduction pro rata: 2/5 and 3/5.
+    # Regulation: MAGI $8,800 and $3,200, total $12,000.
+    adjusted_gross_income: 12_000
+    mo_federal_adjusted_gross_income: [8_800, 3_200]
+
+- name: 12 CSR 10-2.010(2) Example No. 2, short-term and long-term netting
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    people:
+      spouse_1:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 10_000
+        short_term_capital_gains: -200
+        long_term_capital_gains: -8_000
+      spouse_2:
+        age: 40
+        is_tax_unit_spouse: true
+        employment_income: 5_000
+        short_term_capital_gains: -300
+        long_term_capital_gains: 3_000
+    tax_units:
+      tax_unit:
+        members: [spouse_1, spouse_2]
+    marital_units:
+      marital_unit:
+        members: [spouse_1, spouse_2]
+    households:
+      household:
+        members: [spouse_1, spouse_2]
+        state_code: MO
+  output:
+    # The 5,500 excess is 200 + 5,000 for spouse 1 (short-term and the net
+    # long-term loss) and 300 for spouse 2. The regulation's allocation:
+    # "Spouse 1 (5,200/5,500 x 3,000) and Spouse 2 (300/5,500 x 3,000)",
+    # 2,836.36 and 163.64. Its table rounds them to 2,850 and 150.
+    # Spouse 2's long-term gain nets against spouse 1's losses and is in
+    # neither column.
+    adjusted_gross_income: 12_000
+    mo_federal_adjusted_gross_income: [7_163.64, 4_836.36]
+
+- name: 12 CSR 10-2.010(2) Example No. 3, one spouse responsible for the excess
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    people:
+      spouse_1:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 10_000
+        short_term_capital_gains: 1_000
+        long_term_capital_gains: -8_000
+      spouse_2:
+        age: 40
+        is_tax_unit_spouse: true
+        employment_income: 5_000
+        short_term_capital_gains: -1_000
+        long_term_capital_gains: 3_000
+    tax_units:
+      tax_unit:
+        members: [spouse_1, spouse_2]
+    marital_units:
+      marital_unit:
+        members: [spouse_1, spouse_2]
+    households:
+      household:
+        members: [spouse_1, spouse_2]
+        state_code: MO
+  output:
+    # Regulation: MAGI $7,000 and $5,000.
+    adjusted_gross_income: 12_000
+    mo_federal_adjusted_gross_income: [7_000, 5_000]
+
+- name: With a net capital gain each spouse keeps their own gain or loss
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    people:
+      spouse_1:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 20_000
+        long_term_capital_gains: 10_000
+      spouse_2:
+        age: 40
+        is_tax_unit_spouse: true
+        employment_income: 20_000
+        long_term_capital_gains: -4_000
+    tax_units:
+      tax_unit:
+        members: [spouse_1, spouse_2]
+    marital_units:
+      marital_unit:
+        members: [spouse_1, spouse_2]
+    households:
+      household:
+        members: [spouse_1, spouse_2]
+        state_code: MO
+  output:
+    # The worksheet's "Capital gain or loss" line by owner: 30,000 and
+    # 16,000.
+    adjusted_gross_income: 46_000
+    mo_federal_adjusted_gross_income: [30_000, 16_000]
+
+- name: A dependent's column is zero
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      parent:
+        age: 40
+        employment_income: 40_000
+      child:
+        age: 17
+        employment_income: 5_000
+        self_employment_income: -2_000
+    tax_units:
+      tax_unit:
+        members: [parent, child]
+    households:
+      household:
+        members: [parent, child]
+        state_code: MO
+  output:
+    mo_federal_adjusted_gross_income: [40_000, 0]
diff --git a/policyengine_us/tests/policy/baseline/gov/states/mo/tax/income/income_tax/mo_income_tax_before_credits.yaml b/policyengine_us/tests/policy/baseline/gov/states/mo/tax/income/income_tax/mo_income_tax_before_credits.yaml
index 72fd515e064..ac0c6201362 100644
--- a/policyengine_us/tests/policy/baseline/gov/states/mo/tax/income/income_tax/mo_income_tax_before_credits.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/states/mo/tax/income/income_tax/mo_income_tax_before_credits.yaml
@@ -113,3 +113,80 @@
     # (2% + 2.5% + 3% + 3.5% + 4% + 4.5%) x 1,348 + 4.7% x (12,300 - 9,436)
     # = 262.86 + 134.61 (the chart shows $263 + $134.61 = $397.61)
     mo_income_tax_before_credits: 0.195 * 1_348 + 0.047 * (12_300 - 9_436)
+
+# A combined return where one spouse's own business loss exceeds their wages.
+# The Line 1 worksheet puts the loss in that spouse's column, so the other
+# spouse's column carries the whole Missouri taxable income.
+- name: Combined return, 2023, one spouse's column negative
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    people:
+      primary:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 5_000
+        self_employment_income: -15_000
+      secondary:
+        age: 40
+        is_tax_unit_spouse: true
+        employment_income: 100_000
+    tax_units:
+      tax_unit:
+        members: [primary, secondary]
+    marital_units:
+      marital_unit:
+        members: [primary, secondary]
+    households:
+      household:
+        members: [primary, secondary]
+        state_code: MO
+  output:
+    # Line 1 (and 5): -10,000 and 100,000; Line 6: 90,000.
+    # Federal tax: 90,000 - 27,700 = 62,300 taxable;
+    #   10% x 22,000 + 12% x 40,300 = 7,036.
+    # Line 12: 15% (Line 6 from 50,001 to 100,000); Line 13: 1,055.40.
+    # Line 26: 90,000 - 27,700 - 1,055.40 = 61,244.60.
+    # Line 7: 0% and 100%, so Line 27 is 0 and 61,244.60.
+    # Tax: 0.195 x 1,207 + 4.95% x (61,244.60 - 8,449) = 2,848.75.
+    # (main split the loss by gross income share and taxed 4.76% of Line 26
+    # in the primary's low brackets: 36.70 + 2,704.39 = 2,741.09.)
+    mo_federal_income_tax_deduction: 1_055.40
+    mo_taxable_income: [0, 61_244.60]
+    mo_income_tax_before_credits: [0, 2_848.75]
+
+- name: Combined return, 2025, one spouse's separate federal AGI negative
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      primary:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 5_000
+        self_employment_income: -15_000
+      secondary:
+        age: 40
+        is_tax_unit_spouse: true
+        employment_income: 100_000
+    tax_units:
+      tax_unit:
+        members: [primary, secondary]
+    marital_units:
+      marital_unit:
+        members: [primary, secondary]
+    households:
+      household:
+        members: [primary, secondary]
+        state_code: MO
+  output:
+    # Line 1: 0 and the joint 90,000 (2025 instructions, page 6).
+    # Federal tax: 90,000 - 31,500 = 58,500 taxable;
+    #   10% x 23,850 + 12% x 34,650 = 6,543.
+    # Line 13: 15% x 6,543 = 981.45.
+    # Line 26: 90,000 - 31,500 - 981.45 = 57,518.55, all the secondary's.
+    # Tax: 0.195 x 1,313 + 4.7% x (57,518.55 - 9,191) = 2,527.43.
+    # (main: 29.08 + 2,398.70 = 2,427.78.)
+    mo_federal_income_tax_deduction: 981.45
+    mo_taxable_income: [0, 57_518.55]
+    mo_income_tax_before_credits: [0, 2_527.43]
diff --git a/policyengine_us/tests/policy/baseline/gov/states/mo/tax/income/taxable_income/mo_taxable_income.yaml b/policyengine_us/tests/policy/baseline/gov/states/mo/tax/income/taxable_income/mo_taxable_income.yaml
index 7d272cfa8cd..742288358b8 100644
--- a/policyengine_us/tests/policy/baseline/gov/states/mo/tax/income/taxable_income/mo_taxable_income.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/states/mo/tax/income/taxable_income/mo_taxable_income.yaml
@@ -55,3 +55,37 @@
   output:
     # 51,830 - 14,600 = 37,230 (no HoH exemption)
     mo_taxable_income: 37_230
+
+- name: Line 7 gives a spouse with negative Missouri AGI zero percent
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    people:
+      spouse_1:
+        age: 40
+        is_tax_unit_head: true
+        mo_adjusted_gross_income: -15_000
+      spouse_2:
+        age: 40
+        is_tax_unit_spouse: true
+        mo_adjusted_gross_income: 30_000
+    tax_units:
+      tax_unit:
+        members: [spouse_1, spouse_2]
+        mo_federal_income_tax_deduction: 0
+        tax_unit_itemizes: false
+        standard_deduction: 0
+        mo_itemized_deductions: 0
+    marital_units:
+      marital_unit:
+        members: [spouse_1, spouse_2]
+    households:
+      household:
+        members: [spouse_1, spouse_2]
+        state_code: MO
+  output:
+    # The 2023 instructions' example (page 7): "your income is -$15,000 and
+    # your spouse's income is $30,000 ... enter zero percent on Line 7Y and
+    # 100 percent on Line 7S." Line 6 adds the columns: 15,000. With no
+    # deductions Line 26 is 15,000, all of it spouse 2's.
+    mo_taxable_income: [0, 15_000]
diff --git a/policyengine_us/variables/gov/states/mo/tax/income/adjusted_gross_income/mo_adjusted_gross_income.py b/policyengine_us/variables/gov/states/mo/tax/income/adjusted_gross_income/mo_adjusted_gross_income.py
index 2c10fab998c..61c4016a488 100644
--- a/policyengine_us/variables/gov/states/mo/tax/income/adjusted_gross_income/mo_adjusted_gross_income.py
+++ b/policyengine_us/variables/gov/states/mo/tax/income/adjusted_gross_income/mo_adjusted_gross_income.py
@@ -5,56 +5,40 @@ class mo_adjusted_gross_income(Variable):
     value_type = float
     entity = Person
     label = "Missouri adjusted gross income"
+    documentation = (
+        "Each filer's Missouri adjusted gross income on Form MO-1040, Line 5: "
+        "their federal adjusted gross income less their Missouri "
+        "subtractions. A spouse's amount can be negative; Line 6 adds the two "
+        "columns."
+    )
     unit = USD
     definition_period = YEAR
     reference = (
         "https://dor.mo.gov/forms/MO-1040%20Fillable%20Calculating_2021.pdf",
+        # PDF pages 7, 22: the Line 7 note on a spouse with negative income;
+        # Line 5, "Subtract Line 4 from Line 3", and Line 6, "Add columns 5Y
+        # and 5S".
+        "https://dor.mo.gov/forms/MO-1040%20Instructions_2023.pdf#page=7",
+        # 12 CSR 10-2.010(4)(A)2 (effective February 29, 2024): a spouse's
+        # Missouri AGI of -$4,000 after a subtraction.
+        "https://dor.mo.gov/resources/official-final-rules/documents/12_CSR_10-2_010.pdf#page=5",
         "https://revisor.mo.gov/main/OneSection.aspx?section=143.121",
     )
     defined_for = StateCode.MO
 
     def formula(person, period, parameters):
-        gross_income = person("irs_gross_income", period)
-        # subtract federal above-the-line deductions (ALDs) by person
-        # ... subtract some ALDs explicitly by person
-        PERSONAL_ALDS = [
-            "self_employment_tax_ald_person",
-            "self_employed_health_insurance_ald_person",
-            "self_employed_pension_contribution_ald_person",
-        ]
-        tax_unit = person.tax_unit
-        # A tax unit dependent's deductions are on their own return, and are
-        # left out of above_the_line_deductions, as their income is left out
-        # of irs_gross_income.
-        not_dependent = ~person("is_tax_unit_dependent", period)
-        ind_total_personal_alds = not_dependent * add(person, period, PERSONAL_ALDS)
-        unit_total_personal_alds = tax_unit.sum(ind_total_personal_alds)
-        # ... subtract remaining ALDs by adhoc allocation between spouses
-        unit_total_alds = tax_unit("above_the_line_deductions", period)
-        unit_remaining_alds = unit_total_alds - unit_total_personal_alds
-        filing_status = person.tax_unit("filing_status", period)
-        is_married = filing_status == filing_status.possible_values.JOINT
-        is_head = person("is_tax_unit_head", period)
-        is_spouse = person("is_tax_unit_spouse", period)
-        # Allocate remaining ALDs proportionally based on gross income
-        # to avoid losing deductions when one spouse has no income.
-        # Use np.divide with mask to avoid divide-by-zero warnings.
-        unit_gross_income = tax_unit.sum(gross_income)
-        mask = unit_gross_income > 0
-        # Default: head gets 100%, others get 0% (used when unit has no income)
-        default_share = where(is_head, 1.0, 0.0)
-        allocation_share = np.divide(
-            gross_income,
-            unit_gross_income,
-            out=default_share.copy(),  # Copy to avoid modifying default_share
-            where=mask,
-        )
-        allocated_alds = where(
-            is_head | is_spouse,
-            unit_remaining_alds * allocation_share,
-            0,
-        )
-        fed_agi = gross_income - ind_total_personal_alds - allocated_alds
-        # return MO AGI including MO additions and MO subtractions
+        federal_agi = person("mo_federal_adjusted_gross_income", period)
+        # Missouri additions (Line 2) are not modeled.
         subtractions = person("mo_agi_subtractions", period)
-        return max_(0, fed_agi - subtractions)
+        p = parameters(period).gov.states.mo.tax.income.subtractions
+        if p.plan_529_contributions.limited_to_own_agi:
+            # 12 CSR 10-2.010(4)(A)3 (effective February 29, 2024): "the MOST
+            # subtraction is limited to the spouse's Missouri adjusted gross
+            # income". It is taken after the other subtractions.
+            most = person("mo_529_deduction", period)
+            other_subtractions = max_(0, subtractions - most)
+            allowed_most = min_(most, max_(0, federal_agi - other_subtractions))
+            subtractions = other_subtractions + allowed_most
+        # A tax unit dependent's Missouri AGI is on their own return.
+        filer = ~person("is_tax_unit_dependent", period)
+        return filer * (federal_agi - subtractions)
diff --git a/policyengine_us/variables/gov/states/mo/tax/income/adjusted_gross_income/mo_federal_adjusted_gross_income.py b/policyengine_us/variables/gov/states/mo/tax/income/adjusted_gross_income/mo_federal_adjusted_gross_income.py
new file mode 100644
index 00000000000..af5745bdc94
--- /dev/null
+++ b/policyengine_us/variables/gov/states/mo/tax/income/adjusted_gross_income/mo_federal_adjusted_gross_income.py
@@ -0,0 +1,173 @@
+from policyengine_us.model_api import *
+
+
+# Person-level sources whose losses make up the business part of loss_ald.
+BUSINESS_LOSS_SOURCES = [
+    "total_self_employment_income",
+    "farm_operations_income",
+    "rental_income",
+    "farm_rent_income",
+    "estate_income",
+    "partnership_s_corp_income",
+]
+CAPITAL_GAIN_CHARACTERS = ["short_term_capital_gains", "long_term_capital_gains"]
+
+
+class mo_federal_adjusted_gross_income(Variable):
+    value_type = float
+    entity = Person
+    label = "Missouri federal adjusted gross income"
+    documentation = (
+        "Each filer's federal adjusted gross income on Form MO-1040, Line 1. "
+        "On a combined return each spouse's column holds their own income, "
+        "losses and federal adjustments to income, and the two columns add up "
+        "to the joint federal adjusted gross income. From 2024 a negative "
+        "amount is replaced by zero."
+    )
+    unit = USD
+    definition_period = YEAR
+    reference = (
+        # PDF pages 6-7: Line 1 and its worksheet. "The combined income for
+        # you and your spouse must equal the total federal adjusted gross
+        # income you reported on your federal return."
+        "https://dor.mo.gov/forms/MO-1040%20Instructions_2023.pdf#page=6",
+        # Line 1: "enter $0" for a negative federal adjusted gross income.
+        "https://dor.mo.gov/forms/MO-1040%20Instructions_2024.pdf#page=6",
+        # Negative Federal Adjusted Gross Income, citing 12 CSR 10-2.710.
+        "https://dor.mo.gov/forms/MO-1040%20Instructions_2025.pdf#page=6",
+        # PDF pages 1-4: 12 CSR 10-2.010(2), capital losses go to "the
+        # spouse responsible", and (4), each spouse's federal AGI as if on a
+        # separate federal return (effective February 29, 2024).
+        "https://dor.mo.gov/resources/official-final-rules/documents/12_CSR_10-2_010.pdf#page=1",
+        # 12 CSR 10-2.010(5), effective April 30, 2026.
+        "https://dor.mo.gov/resources/official-final-rules/documents/12_CSR_10-2_010_Income_Tax_of_Current_or_Former_Spouses.pdf#page=4",
+        "https://www.law.cornell.edu/regulations/missouri/12-CSR-10-2-710",
+        "https://revisor.mo.gov/main/OneSection.aspx?section=143.121",
+    )
+    defined_for = StateCode.MO
+
+    def formula(person, period, parameters):
+        tax_unit = person.tax_unit
+        # The head and spouse are the filers; a tax unit dependent's income
+        # and deductions are on their own return, as in irs_gross_income.
+        filer = ~person("is_tax_unit_dependent", period)
+        # Items that belong to the couple rather than to one spouse are
+        # divided equally between them.
+        equal_share = filer / max_(tax_unit.sum(filer), 1)
+
+        def attribute(own, amount):
+            # Divide a tax-unit amount in proportion to the filers' own
+            # amounts, or equally when they have none. Use a mask rather than
+            # where to avoid a divide-by-zero warning.
+            own = filer * own
+            total = tax_unit.sum(own)
+            share = np.array(equal_share, dtype=float)
+            mask = total > 0
+            share[mask] = own[mask] / total[mask]
+            return amount * share
+
+        # Federal adjustments to income (Line 1 worksheet, "Subtract: federal
+        # adjustments to income"), each in the column of the spouse it belongs
+        # to. 12 CSR 10-2.010(4), effective February 29, 2024, puts each
+        # spouse's column on a separate-return basis.
+        p = parameters(period).gov.irs.ald
+        adjustments = 0
+        for deduction in p.deductions:
+            if deduction == "loss_ald":
+                continue
+            if person.entity.get_variable(
+                deduction, check_existence=True
+            ).entity.is_person:
+                own = person(deduction, period)
+                adjustments = adjustments + filer * own
+                if deduction in p.filer_amounts_recorded_on_dependents:
+                    # The filers' amounts recorded on a dependent.
+                    adjustments = adjustments + equal_share * tax_unit.sum(~filer * own)
+            elif person.entity.get_variable(f"{deduction}_person") is not None:
+                adjustments = adjustments + attribute(
+                    person(f"{deduction}_person", period), tax_unit(deduction, period)
+                )
+            else:
+                adjustments = adjustments + equal_share * tax_unit(deduction, period)
+
+        # Business and capital losses (loss_ald). The worksheet reports each
+        # spouse's own business, rental, farm and capital gains or losses.
+        loss_ald = tax_unit("loss_ald", period)
+        allowed_against_gains = tax_unit("capital_losses_allowed_against_gains", period)
+        limited_capital_loss = tax_unit("limited_capital_loss", period)
+        business_loss = max_(0, loss_ald - allowed_against_gains - limited_capital_loss)
+        # A Form 4797 loss is recorded for the tax unit, and its gain is
+        # divided equally in other_net_gain_gross_income.
+        own_business_loss = equal_share * max_(0, -tax_unit("other_net_gain", period))
+        for source in BUSINESS_LOSS_SOURCES:
+            own_business_loss = own_business_loss + max_(0, -person(source, period))
+        own_capital_gain = max_(0, person("capital_gains", period)) + max_(
+            0, person("non_sch_d_capital_gains", period)
+        )
+        own_capital_loss = person("capital_losses", period)
+        # 12 CSR 10-2.010(2): when the couple's capital losses exceed their
+        # gains, the excess deduction goes to "the spouse responsible for the
+        # excess", pro rata when both are. In Examples 1-3 the gains drop out
+        # of both columns, so the losses netted against them go to the
+        # spouse with the gains. Responsibility follows the short-term and
+        # long-term netting of Example 2. Otherwise each spouse's losses
+        # netted against gains are their own.
+        net_capital_loss = filer * own_capital_loss
+        net_capital_gain = filer * own_capital_gain
+        losses_exceed_gains = tax_unit.sum(net_capital_loss) > tax_unit.sum(
+            net_capital_gain
+        )
+        allowed_share = where(
+            losses_exceed_gains,
+            attribute(own_capital_gain, allowed_against_gains),
+            attribute(own_capital_loss, allowed_against_gains),
+        )
+        responsibility = 0
+        for character in CAPITAL_GAIN_CHARACTERS:
+            amount = filer * person(character, period)
+            if character == "long_term_capital_gains":
+                # Capital gain distributions are long-term gains.
+                amount = amount + filer * max_(
+                    0, person("non_sch_d_capital_gains", period)
+                )
+            excess = max_(0, -tax_unit.sum(amount))
+            own_loss = max_(0, -amount)
+            unit_loss = tax_unit.sum(own_loss)
+            share = np.zeros_like(unit_loss)
+            mask = unit_loss > 0
+            share[mask] = own_loss[mask] / unit_loss[mask]
+            responsibility = responsibility + excess * share
+        # Without a short-term and long-term split, each spouse's net loss.
+        responsibility = where(
+            tax_unit.sum(responsibility) > 0, responsibility, own_capital_loss
+        )
+        limited_share = attribute(responsibility, limited_capital_loss)
+        own_losses = (
+            attribute(own_business_loss, business_loss) + allowed_share + limited_share
+        )
+        # Scale to loss_ald, in case it is set directly.
+        parts = business_loss + allowed_against_gains + limited_capital_loss
+        loss_share = np.array(equal_share * loss_ald, dtype=float)
+        mask = parts > 0
+        loss_share[mask] = own_losses[mask] * loss_ald[mask] / parts[mask]
+
+        gross_income = person("irs_gross_income", period)
+        separate_agi = filer * gross_income - loss_share - adjustments
+        if parameters(period).gov.contrib.ubi_center.basic_income.taxable:
+            separate_agi = separate_agi + equal_share * tax_unit("basic_income", period)
+
+        p = parameters(period).gov.states.mo.tax.income.federal_agi
+        if not p.negative_floor_applies:
+            return separate_agi
+        # 2025 MO-1040 instructions, page 6, and 12 CSR 10-2.010(5): when
+        # joint federal AGI is zero or less, both spouses enter $0. When it is
+        # positive, a spouse whose separate amount is negative enters $0 and
+        # the other spouse enters the whole joint amount.
+        joint_agi = tax_unit.sum(separate_agi)
+        has_negative = tax_unit.any(separate_agi < 0)
+        line_1 = where(
+            separate_agi < 0,
+            0,
+            where(has_negative, joint_agi, separate_agi),
+        )
+        return filer * where(joint_agi > 0, line_1, 0)
diff --git a/policyengine_us/variables/gov/states/mo/tax/income/taxable_income/mo_taxable_income.py b/policyengine_us/variables/gov/states/mo/tax/income/taxable_income/mo_taxable_income.py
index 7d066360e0c..cb34468f2b0 100644
--- a/policyengine_us/variables/gov/states/mo/tax/income/taxable_income/mo_taxable_income.py
+++ b/policyengine_us/variables/gov/states/mo/tax/income/taxable_income/mo_taxable_income.py
@@ -11,13 +11,16 @@ class mo_taxable_income(Variable):
         "https://dor.mo.gov/forms/MO-A_2021.pdf",
         "https://dor.mo.gov/forms/MO-1040%20Instructions_2021.pdf#page=8",
         "https://dor.mo.gov/forms/MO-1040%20Instructions_2022.pdf#page=8",
+        # Line 7 note on negative income.
+        "https://dor.mo.gov/forms/MO-1040%20Instructions_2023.pdf#page=7",
         "https://dor.mo.gov/forms/MO-1040%20Instructions_2024.pdf#page=8",
         "https://www.revisor.mo.gov/main/OneSection.aspx?section=143.111&bid=7201&hl=",
     )
     defined_for = StateCode.MO
 
     def formula(person, period, parameters):
-        # calculate tax unit MO AGI
+        # calculate tax unit MO AGI: Form MO-1040 Line 6 adds columns 5Y and
+        # 5S, either of which can be negative
         tax_unit = person.tax_unit
         mo_agi = person("mo_adjusted_gross_income", period)
         unit_mo_agi = tax_unit.sum(mo_agi)
@@ -50,10 +53,15 @@ def formula(person, period, parameters):
         unit_taxinc = max_(0, unit_mo_agi - unit_mo_deductions)
 
         # allocate tax unit taxable income by each individual's share of
-        # unit AGI (use a mask rather than where to avoid a divide-by-zero
+        # unit AGI (Line 7). The 2023 instructions (page 7) say: "If one
+        # spouse has negative income and the other spouse has positive
+        # income ... enter zero percent on Line 7Y and 100 percent on Line
+        # 7S." (use a mask rather than where to avoid a divide-by-zero
         # warning with default share value being zero)
-        ind_agi_share = np.zeros_like(unit_mo_agi)
-        mask = unit_mo_agi > 0
-        ind_agi_share[mask] = mo_agi[mask] / unit_mo_agi[mask]
+        positive_mo_agi = max_(0, mo_agi)
+        unit_positive_mo_agi = tax_unit.sum(positive_mo_agi)
+        ind_agi_share = np.zeros_like(unit_positive_mo_agi)
+        mask = unit_positive_mo_agi > 0
+        ind_agi_share[mask] = positive_mo_agi[mask] / unit_positive_mo_agi[mask]
 
         return ind_agi_share * unit_taxinc