The Missouri Department of Revenue has adopted a rule that will allow some employers to withhold tax based on where their employees worked before the COVID-19 pandemic.
The rule, adopted June 15, mirrors the emergency rule proposed by the department in January.
Under the emergency rule, which is effective until July 19, employers can elect to withhold income tax from wages paid to employees if the “wages were earned from work performed at the employee's primary work location, despite such employee working from a temporary work location" during the COVID-19 relief period, which runs from March 13, 2020 — the date the federal government declared the pandemic a "federally declared disaster" — through December 31, 2020.
In response to a request by the Associated Industries of Missouri that the COVID-19 relief period be extended, the DOR noted in the June 15 rule that it "appreciates the comment from AIM and plans to address this concern in the near future."
The emergency rule says, “For services performed by an employee after the declaration date and prior to the earlier of the time at which an employer began withholding based on a time and attendance system for such employee or the end of the COVID-19 relief period, each employer may elect to withhold income tax from wages paid to such employee as if such wages were earned from work performed at the employee’s primary work location, despite such employee working from a temporary work location during the COVID-19 relief period.”
The rule applies only to employers that did not maintain a time and attendance system for all employees on or before March 13, 2020, and that have a “primary work location in Missouri with employees working from temporary work locations in states other than Missouri” or “a primary work location in a state other than Missouri with employees working from temporary work locations in Missouri.”
Employers making the election will be required to submit to the DOR an affidavit notifying the department that they didn't have a time and attendance system in place as of March 13, 2020.