Withholding Tax FAQs

The following is intended to provide general information concerning frequently asked questions about taxes administered by the Mississippi Department of Revenue (DOR). It is an informal interpretation of the tax law and is not intended to serve as a rule, regulation, declaratory opinion, or letter ruling. Legislation, regulations, court decisions, notices and announcements could affect the accuracy of this information. Please refer to the Mississippi Code Annotated and the Mississippi Administrative Code for the most current version of the law and administrative procedures.

Employee / Employer Questions

How do I know how much income tax to withhold from my employee's salary?

Each employee must provide you with a completed and signed Form 89-350. Mississippi Employee's Withholding Exemption Certificate. You should use these forms along with the tax tables to determine how much Income Tax should be withheld from each employee’s paycheck.

What if an employee wants to change their withholding amount?

Employees may change their Mississippi and Federal withholding tax rates by completing a new Mississippi Form 89-350 and Federal Form W-4.

My employer is not withholding tax or will not provide me with a W-2 form. What should I do?

Contact the Withholding Tax Division at (601) 923-7088 or your local district office. You will need to provide the employer’s name, address, phone number and number of employees.

I have an employee that refuses to complete the State Withholding Exemption Certificate. What do I need to do?

You must withhold as if the employee is single with no exemptions.

As an employer, am I responsible for determining if the withholding certificate completed by my employee is correct?

No, however, if you believe that the amount of allowances claimed by an employee is greater than the amount to which the employee is entitled, you should advise the Department of Revenue. If the employee claims more than 10 allowances or claims “exempt” for withholding and the wages normally exceed $200 per week, you must submit a copy of the employee’s withholding certificate to the Department of Revenue.

I am a Mississippi resident, but I work in another state. Is my employer required to withhold Mississippi Income Tax from my salary?

Yes, a resident of Mississippi is subject to Mississippi income tax on all of his/her wages whether he/she works in Mississippi or in another state. If the other state has an income tax, the Mississippi resident will have to file a non-resident return in the other state and pay income tax to that other state. The employer should withhold taxes for the other state’s income tax not Mississippi. When the employee files their Mississippi resident Individual Income Tax Return, a credit for the taxes paid to the other state can be taken.

In order to take the credit, a copy of the income tax return filed with the other state must be attached to your Mississippi income tax return. The tax credit allowed is not a dollar for dollar credit. The withholding amounts shown on your W-2 forms are not the same as the actual tax paid to the other state. As a result, copies of your withholding statements are not sufficient to establish the credit. For additional information, you may refer to Income Tax Instructions, Form 80-100.

I am not a resident of Mississippi, but I work in Mississippi. Is my employer required to withhold Mississippi Income Tax from my salary?

Yes, a non-resident employee is subject to Mississippi income tax on his/her salary for work performed in this state. Employers must withhold Mississippi income tax from all wages earned by non-resident employees for services performed in Mississippi unless their Mississippi earnings for the year will be less than their standard deduction amount for their filing status. Non-resident employees with wages greater than their standard deduction amount are required to file a Mississippi Non-Resident Individual Income Tax Return.

I need to file a prior year’s income tax return but I don’t have my W-2. Can you send me a copy?

No, you must contact your employer who issued the W-2 for a duplicate copy.

I withheld Mississippi taxes for one of my employees that I should have withheld for another state. What should I do?

You should reimburse your employee for the taxes withheld in error and file an amended return(s) for each month/quarter affected. Once the amended return(s) are processed, the overpayment may be used as a credit against the tax due on your next return or you may apply for a refund.

What information should I provide my employees for their records?

You should provide each employee with a statement showing the amount of wages and state income tax withheld. This is usually provided on the Federal Wage and Tax Statement W-2. A copy of the W-2 should also be sent to the Department of Revenue. Information on how to submit W-2s to the Department can be found on our Withholding Tax webpage.

How do I know if a worker is an employee or an independent contractor for Withholding Tax purposes?

The difference between an employee and an independent contractor is based on the degree of control and independence the worker has on the services being provided. The Department of Revenue relies on federal rules to determine if the person providing the services is an employee or an independent contractor. This information can be found on the IRS website.

Do I have to withhold Mississippi Income Tax from compensation paid to Native Americans?

In most situations yes; however, under federal law, a Native American living and working on an Indian Reservation in Mississippi is exempted from Mississippi Income Tax on the income earned on the reservation. As a result, no withholding is required. The employer must have the Mississippi Affidavit for Reservation Indian Income Exclusion From Mississippi State Income Taxes, Form 80-340 to be completed by the employee and must maintain the form to support the exempt status of the employee.

Is Mississippi Income Tax withholding required on pensions and annuities?

No, retirement income, pensions, annuities are not subject to Mississippi Income Tax.

I have hired a sitter or someone to help in my home. Am I required to withhold Income Tax from their wages?

No, domestic help in the home is exempt from the Withholding Tax requirements.

Does Mississippi require withholding on Section 125 Cafeteria Plans?

No, Section 125 Cafeteria Plans are considered pre-tax and thus not subject to withholding.

Are wages paid to corporate officers subject to withholding?

Corporation officers are considered employees of the corporation. Payments for services performed for the corporation are subject to withholding (whether S corporation or C corporation). True dividends, usually paid no more than once a year, are not subject to withholding.

We have employees receiving severance pay. Is this income taxable to the recipient?

Yes, severance pay is taxable to the recipient.

Each year I give my employees a Christmas Bonus. How do I withhold?

If supplemental wages such as commissions, bonuses, or overtime pay are paid at the same time as the employee's regular wage, the amount of tax withheld should be based on the total of the regular and supplemental wages.

Am I required to withhold on tip income?

All tips are subject to Income Tax. Tips paid by the customer to the employee are not subject to Withholding Tax. Tips paid by the customer to the employer who then distributes them to the employees are subject to withholding.

Are wages paid to immediate family members subject to withholding? How about children under the age of 18?

Yes, wages paid for work performed by family members are subject to withholding. This includes your spouse, parent, siblings, and children under the age of 18.

Filing Returns

How do I amend Form W-2?

A Federal Form W2-C must be filed to amend an originally filed W-2. A copy of the W-2C must be filed with the Department of Revenue.

Does Mississippi require a copy of Form W2-C?

Yes, Mississippi requires a copy of the Form W2-C if there is a change in the Mississippi wages and/or withholding. W-2Cs must be submitted in the same format that the original W-2s were submitted in.

When are Withholding Tax returns due?

Withholding returns are due the 15th day of the month following the period. If a due date falls on a Saturday, Sunday, or legal holiday, the due date will fall on the next business day.

Withholding Tax returns are filed monthly or quarterly depending on the average amount of tax you withhold each month. You will be notified of your filing status. Generally, every employer with average liability of $300 or more per month must file a monthly tax return. Employers with smaller tax liabilities may file quarterly returns.

What is the due date for filing W2 information electronically?

All W2s filed electronically are due on or before January 31.

What is the due date for filing 1099 information?

All 1099s filed electronically and paper forms with the Annual Information Return Form 89-140 are due on or before February 28th. The Annual Information Form should only be filed with paper 1099 forms.

Does Mississippi grant extensions for filing W-2s?

No, Mississippi does not grant extensions for filing W-2s.

What are the penalties for filing late?

There is a 10% penalty for the late payment of the tax due plus interest at the rate of 1/2% per month from the date the tax was due.

Where do I get the Mississippi W2 forms and the 1099 information return forms?

Mississippi uses the Federal forms which you can get from the Internal Revenue Service.

I didn’t have any employees during the last reporting period. Do I still need to file a return?

Yes, you will need to file a zero return in order to avoid receiving a delinquent notice for failure to file. You should file a zero return and submit the return on or before the due date.

I made an error when I filed my return. How do I correct it?

To correct an error, you can amend your return in TAP by selecting the period in question and then choose “ File or amend a return” under “I want To”. Complete the form the way it should have been filed. The amended return will replace the original that was filed.

Does Mississippi use a depository system for withholding like the Internal Revenue Service?

No, tax withheld must be paid directly to the Department of Revenue when it is due.

I’m trying to file a prior year’s Income Tax return, but I don’t have my W-2. Can you send me a copy?

No, you should contact the employer who issued the W-2 for a duplicate copy.

What type of media does Mississippi accept for W-2 data files?

TAP is available to file W-2s.

Is electronic reporting of W-2 data voluntary or mandatory?

Employers that issue 25 or more W-2s are required to submit those electronically to the DOR. The taxpayer may be subject to penalties if they issue more than 25 W-2s and do not file as required. You can manually enter or upload your W-2s on TAP. Log into TAP, under “I want To” select the “More” tab and under “Other” select “Submit W2/W2-C Returns”. All employers, regardless of the number of returns, are encouraged to utilize the system to electronically enter and submit return information. Additional information can be found here.

How can I submit my withholding information if I have QuickBooks?

Withholding information (W-2s) must be submitted using the Social Security Administration EFW2 format. For more information on how to create a file using QuickBooks, see the FAQs in Publication 89-145,Procedures and Specifications for Filing Wage and Tax Information Electronically.

What are Mississippi's requirements for reporting miscellaneous income?

You are required to report any income that that exceeds $3,000 annually for salaries, fees, commissions, prizes, bonuses and other income from personal services, or where payments exceed $600 annually in dividends, interest, rents, royalties, annuities, pensions premiums, corporate liquidations and other fixed income.

How do you report miscellaneous income?

Employers that issue 25 or more 1099s are required to electronically submit those through TAP. The taxpayer may be subject to penalties if they issue more than 25 1099s and do not file as required. Logon to TAP, under “I Want To” select the “More” tab and under “Other” select “Submit 1099 Returns” and follow instructions to manually key or attach a 1099 file. All employers, regardless of the number of returns, are encouraged to utilize the system to electronically enter and submit return information. A copy of Federal Form 1099 MISC is used for reporting Mississippi miscellaneous income for employers that issue less than 25 forms.

What records should I keep for Mississippi tax purposes, and how long should I keep them?

You must keep a complete copy of all records pertaining to your business for a minimum of three (3) years. The required records include but are not limited to:

All payroll and withholding information
A listing of who is employed by the month, week or day
Salaries paid
Employees' social security numbers and home addresses

Your records must be kept in a place and manner that is easily accessible for review by the Department of Revenue.

Registration and Updating Account Information

I’m opening a business and will have employees. What do I need to do?

Every employer engaged in business, licensed to do business, or transacts business in Mississippi or who pays wages to a Mississippi resident (regardless of where the services are performed), or pays wages to a non-resident (persons domiciled outside of Mississippi ) for services performed in Mississippi must register for a Withholding Tax account. Register online through the Taxpayer Access Point. Go to TAP and select "Register Now."

How long does it take to complete registration?

Please allow up to 10 business days for the completion of the Withholding account registration.

What kind of information do I receive from the DOR after I register?

You will receive a letter including information about Withholding Tax, due dates and filing requirements.

Can I use my Federal Employers Identification Number (FEIN) as my Mississippi withholding tax account number?

No, Mississippi issues a unique eight-digit number to identify each tax account. Your FEIN is used in the registration process to identify the taxpayer entity.

How do I get a FEIN?

FEINs are issued by the Internal Revenue Service (IRS). Information on how to apply for a FEIN can be found on the IRS website at www.irs.gov.

How do I file Withholding Tax returns?

All taxpayers are encouraged to file and pay electronically through TAP. Withholding taxpayers with a liability of $20,000 or more for any reporting period are required to file and pay electronically. A tax return must be filed for each reporting period even if no tax is due.

Bulk filing through the Federal/State Employment Taxes (FSET) program is also available. If you use a software package, it is likely that your software has the capability to transmit returns and payment information to the Department of Revenue in bulk through the FSET program. If you file using FSET, you will not need to use TAP to file and pay. Contact your software provider to see if bulk filing through FSET is available.

My Federal identification number changed. Do I need a new Withholding Tax account?

If your Federal identification number changes, you need to apply for a new State Withholding Tax account by filing the registration application.

I purchased an existing business. Can I use the previous owner’s withholding account number?

No, you must register for a new withholding account. It is your responsibility to notify the Department of Revenue of any changes related to your business including changes in your address, changes in corporate officers, or changes in ownership.

I am presently a proprietorship (or partnership.) Do I need to obtain a new withholding account if I should incorporate?

Yes, you must register for a new withholding account. It is your responsibility to notify the Department of Revenue of any changes related to your business including changes in your address, changes in corporate officers, or changes in ownership.

If I change the trade name of my business, do I need to get a new withholding account?

No. However, you should advise the DOR in writing of the details and the date the changes were made.

Are non-profit organizations required to withhold tax from their employees?

Yes, non-profit organizations, such as charitable, religious and governmental organizations, are required to withhold Mississippi Income Tax.

How do I close my Mississippi Withholding Tax account?

A final return must be filed in order to close your withholding account. You must also submit an account closure request by logging on to TAP and selecting "Close This Account" under "I Want To" and then select the "More" tab. If you are not able to submit a request online, you may fax a signed written request to the Withholding Division at (601) 923-7188. If sending a fax, the account closure request must include the following:

The name, FEIN and reason for closing the account
If the account is being closed due to the company being sold, you must include the new owner’s name, address and FEIN (if applicable)
The specific date that the last wages were paid to employees in Mississippi
Your contact information in the event that there is a problem closing the account

If you are not closing your business but no longer have employees, you may continue to file zero returns or request that your account be closed. However, you would need to file W-2s for any wages paid during the year.

How do I change my address or other information?

You can change your address or other information by logging in to TAP and follow the instructions for updating your account information. If you are not able to update your information online, you may fax a request on your letterhead showing the name, FEIN, current address and new address to the Withholding Division at (601) 923-7188.

Withholding - Other

Who do I contact about Unemployment Taxes?

For questions concerning unemployment tax, please contact the Mississippi Department of Employment Security at (601) 321-6000 or toll free at 1-888-844-3577. Information can also be found on their website at www.mdes.ms.gov.

Who do I contact for information about Workers' Compensation?

For questions concerning workers' compensation, please contact the Mississippi Workers’ Compensation Commission at (601) 987-4200. Information can also be found on their website at www.mwcc.ms.gov.

Where do I pay social security taxes?

For information on social security taxes, please contact the Social Security Administration at 1 (800) 772-1213 or online at www.ssa.gov.