Withholding Taxes: Mississippi

Federal law and guidance on this subject should be reviewed together with this section.

Author: Vicki M. Lambert, The Payroll Advisor

Summary

• Wages paid to Mississippi residents who work in or outside the state are subject to income tax withholding. An employee is a Mississippi resident for income tax purposes if certain criteria are met. Mississippi income tax must also be withheld from wages paid to Mississippi nonresidents for services performed in the state. See Withholding on Residents, Nonresidents and Expatriates.
• Mississippi employers determine withholding using state Form 89-350, Mississippi Employee's Withholding Exemption Certificate. See Employee's Withholding Exemption Certificate.
• Withholding on supplemental wage payments, such as bonuses, is calculated differently depending on when the supplemental wage payments are made. See Supplemental Wages.
• Each year, employers must provide copies of federal Form W-2, Wage and Tax Statement, to each employee from whom any amount of Mississippi income tax was withheld, or would have been withheld under the approved tables and other methods if the employee had claimed no more than one withholding allowance. Special rules apply to terminated employees. See Form W-2 Reporting Requirements.
• Employers are required to keep records of wages paid and taxes withheld for a t least three years. See Recordkeeping Requirements.