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March 6, 2019
2019-0479

Missouri taxpayers could have had too little state income tax withheld for 2018

News sources are reporting that Missouri taxpayers may see a surprise tax bill during the 2019 tax filing season (for tax year 2018) due to a combination of the effect the federal Tax Cuts and Jobs Act (TCJA) is having on state taxes and the discovery of a long-standing state withholding formula error. (Associated Press, December 31, 2018; St. Louis Post-Dispatch, January 24, 2019.)

The Missouri Department of Revenue discovered the error late last year and released revised 2018 withholding tables/formula in October 2018. However, the revisions may not have occurred soon enough to avoid under-withholding for the year, which could result in taxpayers owing state income tax rather than breaking even or receiving a tax refund. (EY Payroll Newsflash Vol. 19, #163, 10-10-2018.)

Missouri State Representative Crystal Quade introduced legislation (HB 378) that would extend the 2018 income tax payment due date to June 15, 2019 for individuals who timely file their tax return by April 15, 2019 and have an outstanding tax liability of less than $200. The bill would also establish an installment plan for taxpayers unable to meet the proposed June 15 deadline.

Department Director Joel Waters testified on January 23, 2019, to the Missouri State House budget committee that although anticipated fiscal year 2019 revenues are down from this time last year, he expects the state will still meet its projections. (Associated Press, January 24, 2019.)

Go here to see Missouri State Treasurer Scott Fitzpatrick's guest commentary (Kansas City Star, January 26, 2019) and here to see Missouri State Representative Kip Kendrick's (Ranking Minority Member, Missouri House budget committee) comments on the withholding error and budget shortfall commentary.

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Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Advisory Services - Employment Tax Advisory Services
   • Kenneth Hausser (kenneth.hausser@ey.com)
   • Debera Salam (debera.salam@ey.com)

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