State Of Missouri Employer'S Tax Guide - 2012 Page 5
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28C. Missouri Employer with Nonresident Employees
If supplemental wages are paid in a payment separate from regular
If a nonresident employee performs all services outside Missouri,
wages, the method of withholding Missouri income tax depends
his/her wages are not subject to Missouri withholding. A nonresi‑
in part on whether you withhold income tax from the employee’s
dent employee performing services in more than one state is
regular wages.
subject to withholding as outlined in Section 4A.
If you withhold Missouri income tax from the employee’s regular
wages, you may choose one of two methods for withholding
Note: Missouri does not have a reciprocity agreement with any
income tax on the supplemental wages:
other state.
1) Withhold a flat percentage rate of 6 percent of the supple‑
5. Interstate Transportation Employees
mental wages, using zero withholding allowances; or
A. Rail, Motor, and Private Motor Carriers
2) Add the supplemental wages to the regular wages paid to
the employee within the same calendar year for the payroll
49 USC Sections 11502 and 14503 limit state taxation on wages
period and determine the income tax to be withheld as if
of employees of rail, motor, and private motor carriers. Missouri
withholding is required on rail, motor, and private motor carrier
the aggregate amount were one payment. Subtract the tax
em ployees whose state of residence is Missouri. Employees of rail
already withheld from the regular wage payment and with‑
carriers and motor carriers who perform regularly assigned duties
hold the remaining tax from the supplemental wage payment.
in more than one state are subject to state income tax only in their
If you have not withheld income tax from the regular wages (e.g.,
state of residency.
when an employee’s withholding exemption exceeds the employ‑
ee’s wages), you must use the method covered in Section 7, A.2.
B. Air and Water Carriers
Add the supplemental wages to the regular wages paid within the
49 USC Section 40116 limits taxation on wages of employees of
same calendar year for the payroll period and withhold income tax
air and water carriers to the employees’ state of residence and to
on the total amount as if the supplemental wages and regular wages
the state in which the employees earn more than 50 percent of the
were one payment for a regular payroll period.
wages paid by the air or water carrier, if different from the state of
residence.
B. Vacation Pay
If an employee receives vacation pay for an absence, the vacation
pay is subject to Missouri income tax withholding as if it were
6. Voluntary Withholding
a regular wage payment made for the payroll periods during the
A. Voluntary Withholding on Retirement, Pension, or Annuity
vacation. If vacation pay is paid in addition to regular wages for
Income
the vacation period, the vacation pay is treated as a supplemental
Every Missouri resident, including retired members of the armed
wage payment.
forces, receiving retirement, pension, or annuity income in this
The vacation pay of an employee who is not a resident of Missouri,
state, may elect to have an amount withheld as a payment of state
but works in Missouri, is subject to Missouri income tax withholding.
income tax provided such income is taxable in this state. The recip‑
ient should determine the amount to be withheld and file Form MO
C. Tips
W‑4P, Withholding Certificate for Pension or Annuity Statements,
Employers must withhold Missouri income tax based upon total tips
with the administrator of his/her retirement, pension, or annuity
reported by the employee. Withhold Missouri income tax on tips
plan. For further information call (573) 751‑3505. Withholding for
using the same options indicated for withholding on supplemental
active duty members of the armed forces is covered in Section 6.C.
wage payments in Section 7.A.
B. Voluntary Withholding for Civil Service Annuitants
D. Lump Sum and Periodic Distributions
Civil service annuitants may elect to have state income taxes with‑
Missouri follows the federal guidelines for lump sum and periodic
held from their regular annuity payments by contacting the Office
distributions. On lump sum distributions, withhold at the rate of 6
of Personnel Management at (202) 606‑0500.
percent. If a periodic distribution, follow the formula on page 15,
or use the tax tables provided on pages 17–26.
C. Withholding for Active Duty Members of the Armed Forces
Section 143.191, RSMo, requires withholding by every employer
8. Determining Proper Amount to Withhold
maintaining an office or transacting any business within Missouri
To determine income tax withholding, take the following factors
and making payment of any wages taxable under Sections 143.011
into account:
to 143.998, RSMo. This also includes active duty pay to members
of the armed services. For further information call (573) 751‑3505.
1) Wages paid during the payroll period, including tips and
Withholding for retired members of the armed forces is covered in
vacation pay;
Section 6.A.
2) Withholding allowances and filing status as indicated on the
Note: Visit for forms and more informa‑
Form MO W‑4. (Only when using the tax formula.)
tion about voluntary withholding.
3) If an employee does not complete and turn in the required
Form MO W‑4, withhold using zero allowances at a single
7. Supplemental Wage Payments, Vacation Pay,
tax rate.
Tips, and Lump Sum and Periodic Distributions
A. Form MO W-4, Employee Withholding Allowance Certificate
A. Supplemental Wage Payments
In recent years, the Form MO W‑4 has been simplified to allow
If supplemental wages are paid (such as bonuses, commissions,
employees to more easily and accurately forecast his/her tax
severance pay, overtime pay, back pay, including retroactive wage
liability. The revisions included additional withholding allow‑
increases, or reimbursements for nondeductible moving expenses)
ances for employees who use Head of Household as their filing
in the same payment with regular wages, withhold Missouri
status and additional instructions for married filers. The employee
income tax as if the total of the supplemental and regular wages
has the option to include his/her spouse as an allowance by indi‑
were a single wage payment for the regular payroll period.
cating his/her spouse does not work. If the spouse does not work,
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