Missouri sent an adjusted refund which assumed (incorrectly) that I was *not* working remotely in Illinois (where I reside). I work 100% remote. How do I get full refund?

[lancerb1]

When I hired on during Covid in January 2021, my residence wasn't settled (I ended up buying a house, where I work 100% remotely, on the Illinois side of the Mississippi river). My Missouri employer began Missouri witholding by default. The Missouri DOR website gives an example of a Kansas resident with Missouri income that does not have to pay Missouri tax because they work 100% remote. This is consistent with my current arrangement in Illinois, as well as TurboTax's guidance. Nevertheless, Missouri took it upon themselvers to recalculate my taxes and send a reduced refund (not the full amount as calculated by TurboTax). How do I fix this and get the full refund? I submitted an Illinois return in which I paid tax on this income.

[TomD8]

Did Missouri inform you by mail about the refund adjustment?  If so, the letter should contain instructions on how to appeal their decision.

If you were a non-resident of MO for all of 2021, and you never physically worked in MO in 2021, then your work income would not be subject to MO income tax.

[lancerb1]

Yes, the state of Missouri sent a letter about a week after it sent the adjusted check. I am looking at the letter, but there is no explanation for *why* it was adjusted, just a statement that it *has* been adjusted. As a consequence, I do not know how to appeal. Or what exactly I am appealing. I don't know what documentation they require. It's a little dystopian that the state can substitute its preferred reality (apparently, one in which I owe tax), with no explanation.

The letter just says I can file a written appeal within 60 days and can provide any documents I would like considered. Has anyone else encountered this? How did they appeal (i.e., what did they provide - just a statement that they worked remote 100% for 2021, or something more)?

[Rick19744]

A few comments on your follow-up response:

• You don't indicate what return you filed for Missouri.  Did you file a nonresident tax return?
• When you completed your MO return, did you indicate that you had zero MO income?
• Has your employer corrected their withholding of MO tax?
• Is there an address on the letter you received?

[lancerb1]

We both filed form MO-NRI and marked Nonresident of Missouri, with Illinois as state of residence during 2021. We also both marked Remote Work (though my wife has no income).

We indicated zero Missouri income on page 2 of form MO-NRI.

As of this year, I have corrected my withholding to Illinois instead of Missouri. I no longer have Missouri withholding.

As for address, there is the address of the Missouri DOR on the letter head. That's it. No specific address is listed for me to file a protest. Our address on the form is our Illinois residence.

[Hal_Al]

@lancerb1  said: "When I hired on during Covid in January 2021, my residence wasn't settled (I ended up buying a house, where I work 100% remotely, on the Illinois side of the Mississippi river). My Missouri employer began Missouri witholding by default"

Where were you living prior to establishing IL residency?  If MO, you probably shoulda filed a partial year resident return, rather than non resident.  

I suggest you call MO DOR, explain your situation and get specific instruction for the appeal. It sounds like you just need to write a letter explaining the details of the situation (something that couldn't be done just by filing standard forms). 

[TomD8]

You may find this website useful:

https://dor.mo.gov/taxation/individual/tax-types/income/notices.html

Note that you can email the MO tax department at income@dor.mo.gov

Also note that the website says that you can file a protest after you receive an "Assessment of Unpaid Tax Notice".  The mailing address for protest letters is in that section of the website.

[Rick19744 · Accepted solution]

Thanks for the responses to my questions:

• Use the address on the letter to file your protest
• Send your letter certified mail return receipt requested
• In your letter of response, indicate the following:
  • You received their letter adjusting your tax liability (enclose a copy of the MO letter).
  • Indicate that you do not agree with the proposal and provide your facts; MO nonresident, work remote 100% of the time, MO withholding was erroneous and has now been corrected by your employer, enclose a copy of your research from the MO website supporting your position, indicate that based on your facts you believe that your originally filed return was correct and that you do not agree with the MO adjustment, indicate what you believe MO still owes you.
  • Make a copy of the entire packet for your records as well

[lancerb1]

Thanks to everyone who responded for the excellent help!