United States

Missouri temporary location withholding requires notice by January 31


On Jan. 6, 2021, Missouri issued an emergency rule modifying the withholding of Missouri state income tax by certain employers for employees working from temporary locations during the COVID-19 public health emergency.   

The rule applies only to employers that did not maintain a time and attendance system for all employees on or before March 13, 2020 (the ‘declaration date’), and either:

  • Have a primary work location in Missouri with employees working from temporary work locations in other states, or
  • Have a primary work location in another state with employees working from temporary work locations in Missouri

Employers who meet these criteria may elect to withhold income tax from employee wages as if the wages were earned from work performed at the primary work location. 

The primary work location is the address of the employer where the employee was regularly assigned to work immediately preceding the declaration date. Temporary work locations are defined as locations where the employee worked during the COVID-19 relief period in a different state than the primary work location. 

An electing employer must submit an affidavit to notify the Missouri Department of Revenue by Jan. 31, 2021 of the following:

  • The employer did not have a time and attendance system in place for all employees as of March 13, 2020
  • If the employer implemented a time and attendance system during the COVID-19 relief period, the employer did not have such a system prior to March 13, 2020
  • The employer will issue Forms W-2 to employees consistent with the primary work location for the portion of the COVID-19 relief period for which the employee was not covered by a time and attendance system
  • The employer will notify impacted employees of the election within five business days after submitting the affidavit

Finally, the emergency rules provide a number of examples and scenarios to help employers determine whether to make the election. 

St. Louis Earnings Tax

The St. Louis Office of the Collector of Revenue has issued a clarification regarding the St. Louis Earnings Tax for employers that have allowed employees to work virtually. The Collector has explained that the earnings tax guidelines have not changed due to the increase in virtual work. Accordingly, employees who live within St. Louis city limits are required to pay the earnings tax, no matter where they work, and employees who live outside of the St. Louis city limits for employers within the city limits are required to pay the earnings tax, even if they are working virtually. 


The nature of withholding has become increasingly complex throughout the COVID-19 pandemic with the increase in remote work. Missouri’s emergency rule contemplates that employers may have difficulty determining withholding location. Employers with a primary work location in Missouri who have employees temporarily working in another state, and employers with a primary work location in another state who have employees temporarily working in Missouri should be aware of the opportunity to elect withholding as described above. The affidavit and notification requirements are due to the department by Jan. 31, 2021. 

Employers and employees should understand that we are likely never going back to the pre-pandemic working dynamic. Remote workforces will complicate state tax nexus and withholding. Taxpayers should review where their employees are located and what state tax liability and compliance obligations result. 



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