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 must be determined from withholding tables provided by the state Department of Revenue (DOR).
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Taxes must be withheld on “wages,” which include all cash and noncash payments for services performed by an employee.
Each new hire must provide the employer with a state Exemption Certificate (Form 89-350). The federal Form W-4 alone will not supply the proper information for Mississippi withholding purposes. If the employee fails to file Form 89-350, the employer must calculate withholding based on zero exemptions. An employee must file a new certificate within 10 days if a change in exemption status increases the amount to be withheld.
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
Vacation pay received for the time of absence is treated as regular pay. Vacation pay received in addition to regular pay is treated ...

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