Missouri Code of State Regulations › Title 12 - DEPARTMENT OF REVENUE › Division 10 - Director of Revenue › Chapter 2 - Income Tax › Section 12 CSR 10-2.015 - Withholding of Tax

Current through Register Vol. 49, No. 14, July 15, 2024
PURPOSE: This rule provides guidance for the
				  withholding of Missouri income taxes from wages or retirement
				  income.
(1) Registration of
				Employers. Every employer required to deduct and withhold any amount of tax
				under section 143.191, RSMo, must register
				with the Missouri Department of Revenue by completing the Missouri Tax
				Registration Application Form 2643 or through the online business registration
				feature on the Missouri Department of Revenue's website. A Missouri tax
				identification number will be assigned. A new registration is required, and a
				new Missouri tax identification number will be assigned, when any change in
				ownership or ownership type occurs. An employer who receives a new Missouri tax
				identification number as a result of a change in ownership type must file a
				Final Report Form 5633, to close the old account. These Missouri tax
				identification numbers are not transferable. It is recommended that the
				Missouri tax identification number be included in all reports and
				correspondence from the employer to the Missouri Department of Revenue
				concerning withholding. If a business is discontinued, transferred, or sold, or
				if an employer closes or indefinitely ceases to pay wages, the employer must
				close the employer's withholding account by filing a Final Report (Form 5633).
				If the business of another employer is acquired, do not use the Missouri tax
				identification number assigned to that business; a new Missouri tax
				identification number must be obtained. Employer With More Than One (1) Payroll
				Unit-Complex Employer. If a consolidated report and remittance of the tax
				withheld cannot be made by the employer because of the complexity of the
				organization, branch offices, or divisions may be designated as withholding
				agents. These agents can perform the actual withholding and remitting. However,
				regardless of any internal arrangements which may be established by the complex
				employer, the legal responsibility and liability under the law still rests with
				the home office. If the complex employer has designated withholding agents, and
				the agents wish to claim the compensation deduction, only one (1) agent will be
				entitled to the full deduction and the remaining agents will be entitled to
				one-half of one percent (1/2%) deduction of income taxes withheld if the
				returns are filed timely.
(2)
				Seasonal. If an employer is only open for several months out of the year, the
				employer may register as a seasonal employer on Form 2643. Notwithstanding any
				section of this rule to the contrary, a seasonal employer is not required to
				file the Employer's Return of Income Taxes Withheld (Form MO-941) for the
				withholding tax periods that the employer indicates to the Missouri Department
				of Revenue it will not have employees, if the seasonal employer does not pay
				wages during such periods.
(3)
				Wages and Employees. The term wages for Missouri withholding purposes means
				wages as defined by section 3401(a) of the Internal
				Revenue Code of 1986, as amended. The term employee for Missouri withholding
				purposes has the same meaning as used in section
				3401(a) of the Internal
				Revenue Code of 1986, as amended.
(4) Interstate Transportation Employees. An
				employer is not required to withhold Missouri income tax from the wages of an
				interstate transportation employee if such withholding requirement is
				prohibited by an applicable federal statute, or if a federal statute exempts
				all the wages paid by an employer to the interstate transportation employee
				from Missouri income tax. For example, under
				49 U.S.C. Section
				11502, the compensation paid by certain rail
				carriers to employees who perform regularly assigned duties on a railroad in
				more than one (1) state is subject to income tax only in the employee's state
				of residence.
(5) Nonresident
				Employees. If a nonresident employee performs all services within Missouri, tax
				shall be withheld from all wages paid as in the case of a resident. If a
				nonresident employee performs all services outside Missouri, his or her wages
				are not subject to Missouri withholding. If services are performed partly
				within and partly outside the state, the nonresident employee shall provide a
				completed Certificate of Nonresidence or Allocation of Withholding Tax (Form MO
				W-4A) to the employer, and only wages paid for services performed within
				Missouri are subject to Missouri withholding tax. If only a portion of an
				employee's wages is subject to Missouri withholding tax, then the amount of
				Missouri tax required to be withheld is calculated using a percent of the
				amount listed in the withholding tables. The calculation begins by determining
				the amount that would be withheld if all the wages were subject to Missouri
				withholding. This amount is then multiplied by a percent, which is determined
				by dividing the wages subject to Missouri withholding tax by the total federal
				wages.
(A) Example: Nonresident earns $20,000
				in wages, $12,000 from Missouri sources. Missouri withholding would be 60%
				($12,000 ÷ $20,000 equals 60%) of the withholding required on $20,000.
				Therefore, if $100 per month should be withheld for an individual earning
				$20,000, then for this nonresident, $60 should be withheld each month (100 x
				60% = $60).