2019 Withholding Tax and MO W-4 Changes

In the 2018 legislative session, House Bill 2540 was passed and amended Section 143.171, RSMo, related to the federal tax deduction. Effective for tax year 2019, the federal income tax deduction taxpayers may claim is prorated based on the taxpayer’s federal adjusted gross income. In an attempt to ease implementation of the new withholding formula, the Department of Revenue chose to remove the federal tax deduction from the withholding tax calculation. This change may result in a small increase to the amount withheld from employee’s paychecks. Any withholding in excess of the tax owed will be refunded after the taxpayer files their individual income tax return.

The Department of Revenue encourages all employees to review their W-4 and to make corresponding changes based on their filing status. There are no longer allowances in the Missouri withholding tables. Employees can no longer increase or decrease the amount withheld from their paychecks by claiming allowances that are not consistent with their specific filing situation.  If the employee needs additional amounts withheld, they should add the additional amount on line 2 of the W-4.

The withholding tax tables, withholding formula, and MO W-4 have been updated. The Missouri Employer’s Guide (Form 4282) and withholding tax calculator will be updated. Please check back periodically for updates.

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(Section 143.191, RSMo) Withholding is the tax that an employer deducts and withholds from employees’ wages every pay period. The withholding is based on the employee’s wages during that pay period and number of dependents. When the employee calculates his income taxes for the year, the amount of taxes withheld helps determine whether a refund is issued to the taxpayer (more was withheld than necessary) or whether the taxpayer owes more in tax (less tax was withheld than necessary).

The information and links below are helpful to businesses that must withhold taxes for their employees.

Employer’s Tax Guide (Contents of the Tax Guide are as follows)

  • Nonresident Individual Partners and Shareholders
  • Transient Employers
  • Nonresident Subject to Withholding
  • Resident Working in Another State
  • Voluntary Withholding
  • Supplemental Wage Payments
  • Lump Sum Distributions
  • Filing Frequency Requirements
  • Under or Over Reporting of Withholding Tax
  • Employer Compensation Deduction
  • Credit Programs
  • Delinquent Returns and Payments
  • Failure to Pay Taxes Withheld
  • Personal Liability
  • Statements for Employees (W-2 or 1099R)
  • Final Reporting
  • Record Keeping Requirements
  • Withholding Tables
  • W-2 Reporting and Filing Requirements