MO-NRI Tax Question

[taxman_us]

Greetings. We live in CT but spouse worked remotely for MO based employer for a part of 2022. The end client was in some other state. Received W2 Box1:10K, Box 16 MO: 5K and CT:10K - both with state tax deducted.

Married filing jointly:

1. a) Started with MO state tax for first: I'm sure Spouse considered as remote worker but 5K considered Missouri Source income? 

b) Do I need to report 5K in Missouri Income filing? Currently the way I did, TT end up not showing 5K anywhere except my worksheets. However, showing MO state tax return amount with in MO form.

c) For CT, I skipped other state credits.. so no MO related information entered there.

Am I in the right direction. I'm not sure If I have to show 5K on MO-NRI form. Please advise.

Thank you,

MS

[ErnieS0 · Accepted solution]

No. Income earned by a Missouri non-resident who never works in Missouri is not Missouri Source Income. Your employer should not have withheld MO tax on your spouse’s income.

Missouri says:

I am a Missouri Employer but I have nonresident employees who work in a state other than Missouri. Am I obligated to withhold Missouri tax from these employee’s wages?

No. If a non-resident employee performs all of their services outside of Missouri, the wages paid to that employee are not subject to Missouri withholding.

For additional information, refer to the withholding tax frequently asked questions web page.

You can file a non-resident MO return to get back the tax withheld.

G

1. o to screen “Remote Work” in the Missouri section
2. Enter all of your spouse’s income in the box Remote Work Income
3. On “Income Allocations” Income From Missouri Sources should be $0

MO W-4

Your spouse should fill out and give the employer a copy of Form MO W-4 with the exempt box checked to stop Missouri withholding.

Connecticut Other State Credits

You are correct in skipping the other state tax credit on your CT return. Since you are getting back all your MO withholding, there is no credit for any tax paid to MO.

[taxman_us]

Thank you so much. No longer work for the employer but thank you for the W-4 tip.

Reference to MO-NRI, I took pdf form of what filled in...

a) Remote work is checked in Part A

b) part B: All '0' - nothing filled for spouse section as well for A. Wages, Salaries, tips etc (should I see MO wages from W2 here- 5K)

c) Part C - 2 'Taxpayer’s total adjusted gross income': Filled with my Income and spouse income (box1 of W2).

Those sound correct?

Regards,

MS

[AmyC · Accepted solution]

Part B should be zero since it was remote work.

Part C shows your zero MO taxable income divided by your actual total income.

The MO-1040 will show 0% on line 32 and no tax on line 36. You should have a refund on line 52.

From my attempts to duplicate your situation:

[taxman_us]

Thank you!