Mississippi Non Resident Income Tax Filing Requirements

Individuals who do not reside in Mississippi but earn income within its borders may be subject to state income tax. This obligation requires understanding specific state tax laws that apply to non-residents.

Determining Your Filing Requirement

For tax purposes, a non-resident is someone who does not maintain a legal residence in Mississippi. This is distinct from a part-year resident, who moves into or out of the state during the tax year. Non-residents must file a Mississippi tax return if they have any income that is taxed by the state.

The state mandates filing for non-residents whose income from Mississippi sources exceeds the value of their prorated personal and dependent exemptions. The proration is based on the ratio of Mississippi-sourced income to total federal income. Because this calculation often results in a very low exemption amount, most non-residents with any earnings in the state will find they are required to file a return.

Identifying Mississippi-Source Income

Income considered to be from a Mississippi source is the basis for a non-resident’s tax obligation. This includes:

• Wages or other compensation earned for services performed physically within the state.
• Income from operating a business, trade, or profession within Mississippi, including earnings from partnerships, S corporations, and sole proprietorships.
• Rental income from real property located in Mississippi.
• Gains from the sale of that same real property.
• Royalties from Mississippi property, such as mineral rights.

Conversely, certain income types are not considered sourced to Mississippi for non-residents. This includes interest and dividends earned from bank accounts or investments, provided they are not part of a business conducted in the state. Pension and retirement income received by a non-resident is also excluded from Mississippi taxation.

Calculating Your Mississippi Tax Liability

First, tax is computed on the individual’s total income from all sources, as if they were a full-year resident, using the state’s standard tax brackets and rates. Next, an apportionment percentage is determined by dividing the non-resident’s Mississippi adjusted gross income by their total adjusted gross income from all sources. This ratio represents the fraction of their economic activity connected to Mississippi.

Finally, this apportionment percentage is applied to the initial tax amount to find the actual Mississippi tax liability. For example, if a non-resident’s total income is $100,000 and their Mississippi-source income is $20,000, the apportionment percentage is 20%. If the tax on the full $100,000 was calculated to be $4,000, the final Mississippi tax owed would be 20% of that, or $800.

Credit for Taxes Paid to Another State

To prevent double taxation, Mississippi allows a credit for taxes paid to another state on income that is also taxable in Mississippi. A non-resident must file a return in the other state to claim this credit. The credit is based on the actual tax liability, not the amount of tax withheld. Taxpayers must attach a copy of the other state’s tax return to their Mississippi filing to be allowed this credit.

Filing Your Non-Resident Return

Non-residents must use Form 80-205, the Mississippi Non-Resident or Part-Year Resident Individual Income Tax Return. While some tax preparation software supports this form, the state does not offer a direct e-filing option. The signed, paper return must be mailed to the address specified in the form’s instructions.

The deadline for filing and paying any tax owed is April 15th, but an extension can be requested if an individual cannot meet this deadline. Payments for any tax due should be submitted with the return to avoid penalties and interest.