Withholding changes - Work in IL / Resident in Missouri

deanna-plant

We recently installed a BSI Tax Bulletin (#53) that changed the withholding on our Missouri tax for Missouri resident employees. Before bulletin, only IL withholding was taking because it was the work state. After installing bulletin #53, Lawson started taking both IL and MO withholdings. Because MO is taxed higher than IL, it is taking the difference of the total that should be taxed in MO (giving credit for the IL w/h). If an employee opts out of having the MO withheld by filling out a W4-Missouri form, we need a way to stop the MO from being withheld. Support has indicated this can be accomplished by putting a 1 (Certificate on File) on the PR13 for MO state. This functionality is not working for us. Has anyone run into this and if so, how did you get it to work? Did a CTP have to be installed?

mikael-samuelsson

So far for us, certificate on file only seems to work for states that have a reciprocal agreement with each other (like PA-NJ). For states without an agreement, we've had to put a Y in the Tax Exempt column.

We also ended up adding all states, both work and resident, to our custom nexus data. Our initial understanding was that we would only need to add work states but found at least one state pair that didn't work without it (live MD work PA).

[Updated on 10/6/2015 12:37 PM]