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October 27, 2020

Missouri issues guidance on income tax withholding and nexus for teleworkers, including those employees working temporarily in the state due to COVID-19

The Missouri Department of Revenue explained in its withholding tax frequently questions (FAQs) that income tax and withholding apply to wages earned within the state by employees who are working remotely within the state pursuant to the normal rules that apply. The Department gives no exception for teleworkers who are temporarily working in the state due to COIVD-19.

Below is the FAQ.

Q: Are the wages I pay to employees in Missouri for "remote work" subject to Missouri withholding?

A: Yes. Any time an employee is performing services for an employer in exchange for wages in Missouri, those wages are subject to Missouri withholding. This applies in the case of "remote work" where an employee is located in Missouri and performs services for the employer on a remote basis. This rule also applies if the service for which the employee is receiving wages is "standing down" (i.e., when the employer instructs the employee not to work but the employee is still being paid).

Missouri income tax and withholding requirements

  • Residents. Missouri income tax applies to all wages paid to a resident employee, regardless of the state where the wages were earned. A Missouri employer must withhold Missouri income tax if its Missouri resident employee performs services in a state with an income tax rate that is lower than Missouri's tax rate. In this case, the employer withholds and remits to Missouri the difference between the income tax withholding required for Missouri and the income tax withholding required by the nonresident state.

Missouri residents are allowed a credit for income taxes imposed by another state, political subdivision, or the District of Columbia on income from sources taxable in the other jurisdiction and in Missouri. The maximum credit allowed cannot exceed an amount which bears the same ratio to the Missouri tax due as the amount of Missouri adjusted gross income derived in the other taxing jurisdiction bears to Missouri adjusted gross income from all sources. (Missouri Employer's Tax Guide.)

  • Nonresidents. Missouri requires that income tax be withheld from all wages earned within Missouri by a nonresident employee performing services within the state. (Missouri Employer's Tax Guide.)


Contact Information
For additional information concerning this Alert, please contact:
Workforce Tax Services - Employment Tax Advisory Services
   • Debera Salam (
   • Kenneth Hausser (
   • Kristie Lowery (


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