2fpower
SILVER Star
Been working on this for a couple weeks, seems that KCMO is playing dirty once again..... Just sent it out to my clients, but thought to share it with my Toyota Family.....
If you work in Kansas City, MO and don’t live there, we wanted to reach out to notify you of changes regarding Kansas City’s 1% Earning Tax.
For the past 25 years, an employee who works within Kansas City had 1% of wages withheld during the year. If the non-resident employee worked outside of the city for part of the year, the taxpayer could file a Kansas City Wage Earner tax return and request a refund for the percentage of days worked outside.
Due to COVID, the department received an unprecedented amount of refund requests for the 2020 tax year as so many non-residents worked remote. It is evident that Kansas City expected the 2020 refunds to be a one-year issue and revenue would return to normal in 2021. As many non-residents have continued working remote, the department has stated that it could take up to 6 months for taxpayers to receive their 2021 refunds and there is no indication that they intend to pay interest on their delay.
In early 2022, Kansas City passed new ordinances (ordinance #220164 section 68-393 and the Missouri revised Statue at Missouri Revisor of Statutes - Revised Statutes of Missouri, RSMo, Missouri Law, MO Law, Joint Committee on Legislative Research - https://revisor.mo.gov section 139.031.) that will change the Wage Earner refund process. At first glance, this ordinance seemed like a non-event, however, based on recent communication with the department, it appears the intention is for the refund process to mirror the procedure to protest property taxes. This new process will require a formal notarized written protest submitted to the department followed by an assigned court date to argue the case.
It is evident the department is trying to make it exponentially more difficult for the taxpayer to request and receive their tax refund. To avoid the additional steps, we recommend the following:
Payroll departments may disallow these recommendations as it may differ from their current withholding policies; however, this is your best defense against the new ordinance. If you are unable to change your withholding through the payroll department, we can assist you in filing the protest paperwork for an additional fee.
If you work in Kansas City, MO and don’t live there, we wanted to reach out to notify you of changes regarding Kansas City’s 1% Earning Tax.
For the past 25 years, an employee who works within Kansas City had 1% of wages withheld during the year. If the non-resident employee worked outside of the city for part of the year, the taxpayer could file a Kansas City Wage Earner tax return and request a refund for the percentage of days worked outside.
Due to COVID, the department received an unprecedented amount of refund requests for the 2020 tax year as so many non-residents worked remote. It is evident that Kansas City expected the 2020 refunds to be a one-year issue and revenue would return to normal in 2021. As many non-residents have continued working remote, the department has stated that it could take up to 6 months for taxpayers to receive their 2021 refunds and there is no indication that they intend to pay interest on their delay.
In early 2022, Kansas City passed new ordinances (ordinance #220164 section 68-393 and the Missouri revised Statue at Missouri Revisor of Statutes - Revised Statutes of Missouri, RSMo, Missouri Law, MO Law, Joint Committee on Legislative Research - https://revisor.mo.gov section 139.031.) that will change the Wage Earner refund process. At first glance, this ordinance seemed like a non-event, however, based on recent communication with the department, it appears the intention is for the refund process to mirror the procedure to protest property taxes. This new process will require a formal notarized written protest submitted to the department followed by an assigned court date to argue the case.
It is evident the department is trying to make it exponentially more difficult for the taxpayer to request and receive their tax refund. To avoid the additional steps, we recommend the following:
- Hybrid Non-Resident Employees (combination of remote work and in the office): contact your payroll department to only withhold KCMO taxes for the actual days you are working in the city. If your payroll system has the ability to select a location for each day of time entry, we recommend only selecting “KC” for the days you are physically in the office.
- Fully Remote Non-Residents: contact your payroll department to stop your KCMO withholding.
Payroll departments may disallow these recommendations as it may differ from their current withholding policies; however, this is your best defense against the new ordinance. If you are unable to change your withholding through the payroll department, we can assist you in filing the protest paperwork for an additional fee.
