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Summary of differences between federal and state regulations
Income tax withholding
The Mississippi Income Tax Withholding Act of 1968 provides for the withholding of individual income tax from all employees whose salaries and wages are taxable to the state, regardless of whether they are residents, nonresidents, or nonresident aliens. Mississippi withholding procedures and policies follow very closely those of the Federal Government.
"Income tax withholding" is merely a method of collecting an existing income tax in installments and does not constitute an additional tax levy. The amount to be withheld under the withholding tables is based on existing rates, the standard deduction, and statutory exemptions.
The term "employer" as defined in the Mississippi Income Tax Withholding Act includes:
(a) All persons, firms, corporations, associations, partnerships, joint ventures, trusts, and any other persons or organizations resident in this state or who maintain an office or place of business in the state, or who transact business in this state for whom one or more individuals perform services as an employee or as employees.
(b) Businesses that lease employees by a contract of employment with a leasing firm may be considered the employer for Mississippi withholding tax purposes. In such cases, payments to the leasing company may be attached for such withholding taxes upon default by the leasing firm. Firms that lease employees to businesses are required to maintain separate ledgers of account for these employees. These lease firms must furnish the Tax Commission with an annual summary of wages paid, number of employees and amounts withheld by location. In addition, the commissioner requires firms that lease employees to businesses to give a cash bond or an approved surety bond in an amount sufficient to cover twice the estimated tax liability for a period of three (3) months. This bond is filed with the commissioner prior to beginning business in this state. Failure to comply with this provision will subject such person to penalties.
(c) The Federal Government, its agencies and instrumentalities.
(d) The State of Mississippi, its agencies and instrumentalities.
(e) All counties, cities, and towns.
For the purpose of withholding, the term "employer" includes any organization, which may be exempt from corporate income tax and corporate franchise tax, including non-stock corporations organized and operated exclusively for non-profit purposes.
An "employee" is an individual, whether resident, nonresident or nonresident alien of the state, who performs any service in this state for wages. The term also includes any resident individual legally domiciled in this state who performs any service outside the state for wages. The term also includes any nonresident whose employment and post of duty is in Mississippi, but who may occasionally render services for the Mississippi employer at points outside the state. All officers of corporations and elected public officials (except public officials on a fee basis) are classified as employees. Where an employer-employee relationship exists, payments of wages are subject to withholding.
Unemployment taxes
All states finance UC primarily through contributions from subject employers on the wages of their covered workers. In addition, three states (Alaska, New Jersey, and Pennsylvania) collect contributions from employees. These taxes are deposited by the state to its account in the UTF in the Federal Treasury, and are withdrawn as needed to pay benefits.
Many states have adopted a higher tax base than what is provided in FUTA. Hawaii's wage base is usually higher and changes periodically. In all states, an employer pays a tax on wages paid to each worker within a calendar year up to the amount specified in state law. In addition, most of the states provide an automatic adjustment of the wage base if federal law is amended to apply to a higher wage base than that specified under state law. As a result of the many variables in states taxable wage bases and rates, benefit formulas, and economic conditions, actual tax rates vary greatly among the states and among individual employers within a state.
Wages subject to unemployment tax in this state equal $7,000.
Minimum and maximum rates in this state are 0.4 and 5.4 %. Rates apply to experience rated employers only and do not include applicable surtaxes or penalties.
State
Contacts
Income tax withholding
State Tax Commission
Unemployment taxes
Employment Security Commission
Regulations
Income tax withholding
Income Tax Regulations, Withholding, sections 1101 through 1122
www.dor.ms.gov/Pages/default.aspx