Mississippi Withholding laws & HR compliance analysis

Mississippi Withholding: What you need to know

Mississippi law requires withholding of state income taxes from the wages of residents and nonresidents. Residents are subject to the tax for services performed both within and outside of Mississippi. Nonresidents are subject to the tax only on wages paid for services performed within the state. If the nonresident's principal place of employment is within Mississippi, but the employee occasionally performs services outside the state, withholding of Mississippi income tax is required on all wages, unless withholding is required by the state in which the temporary services are performed. The amount to be withheld may be determined from withholding tables or a computer formula provided by the State Tax Commission.
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Taxes must be withheld on “wages,” which include all cash and noncash payments for services performed by an employee.
Exclusions. Payments for some services, including the following, are exempt from withholding:
• Domestic service
• Agricultural service for a farmer-employer performed on the farm
• Service not in the course of the employer's trade or business
• Religious service performed by ministers or members of religious orders
De minimis fringe benefits
• Moving expense payments
• Meals and lodging
• Golden parachute payments
• Employee-provided dependent care of up to $5,000 per year
• Travel advances or reimbursable expenses
• Employer-provided group life insurance
• Medical savings account contributions
Vacation pay received for the time of absence is treated as regular pay. Vacation pay received in addition to regular pay is treated as a supplemental wage pay for withholding purposes.
Mississippi’s income tax statute does not conform to the Internal Revenue Code, but the law ...

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