According to a Missouri Department of Revenue representative, due to the passage of the federal Tax Cuts and Jobs Act (the tax reform bill) the Department will delay issuance of the 2018 income tax withholding tables. (Email response to inquiry, December 28, 2017.)

Employers should continue to use the 2017 computer formula and tables for wages paid on or after January 1, 2018 until such time as the 2018 income tax withholding tables are available.

For more information on Missouri income tax withholding, go here.

Supplemental wages

According to another Missouri Department of Revenue representative, the supplemental withholding rate for 2018 is expected to continue to be 6.0%. (Telephone conversation, December 28, 2017.)

If supplemental wages are paid (such as bonuses, commissions, severance pay, overtime pay, back pay, including retroactive wage increases, or reimbursements for nondeductible moving expenses) in the same payment with regular wages, withhold Missouri income tax as if the total of the supplemental and regular wages were a single wage payment for the regular payroll period.

If supplemental wages are paid in a payment separate from regular wages, the method of withholding Missouri income tax depends in part on whether you withhold income tax from the employee's regular wages. If you withhold Missouri income tax from the employee's regular wages, you may choose one of two methods for withholding income tax on the supplemental wages:

1. Withhold a flat percentage rate of 6% of the supplemental wages, using zero withholding allowances; or

2. Add the supplemental wages to the regular wages paid to the employee within the same calendar year for the payroll period and determine the income tax to be withheld as if the aggregate amount were one payment. Subtract the tax already withheld from the regular wage payment and withhold the remaining tax from the supplemental wage payment.

Missouri 2017 Forms W-2 due by January 31, 2018

As we reported previously, the deadline for filing calendar year 2017 Forms W-2 is January 31, 2018.

The Department announced that employers filing 250 or more Forms W-2 must file Forms W-2 and MO-W-3, Transmittal of Tax Statements, electronically. Filing on magnetic media will no longer be allowed for these employers. For more information, see the 2017 Missouri employer reporting of W-2s instructions and specifications handbook.

Previously, employers filing 250 or more Forms W-2 with the Department were required to file on CD or flash drive; electronic filing was not an option.??

Employers filing less than 250 Forms W-2 for calendar year 2017 may file electronically or on paper, CD or flash drive. The deadline for filing electronically, or on paper or magnetic media, remains January 31, 2018.??

Employers failing to file using the correct method (i.e., electronically for those with 250 or more employees) or by the January 31 due date, unless an extension of time is granted or it is shown that such failure is due to reasonable cause, may incur a penalty of $2 per W-2 not filed correctly or timely, not to exceed $1,000.

Employers must register to file Form W-2 electronically with the Department.

For more information, see the Department's website.

Ernst & Young LLP insights

The IRS also announced last month that it will delay release of its 2018 federal income tax withholding tables and related guidance until January 2018, with employer implementation required sometime in February 2018.

Missouri is one of many states that updates its income tax withholding tables each year. Several of these states have already released their 2018 income tax withholding tables.

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