How Does Missouri Income Tax Work? Rates, Credits, and Filing Explained

Missouri blends Midwestern affordability with a progressive income tax system that’s gradually shrinking under new tax reforms. For employers, that mix creates both opportunity and complexity, especially if your team spans multiple states or includes remote workers logging in from Kansas City to Cape Girardeau.

While Missouri’s top income tax rate has dropped to 4.7% for 2025, payroll teams still need to manage withholding, unemployment insurance, and local earnings taxes in cities like St. Louis and Kansas City. Understanding how these rules interact—and how to stay compliant as rates shift—is essential to keeping your Missouri payroll clean, compliant, and audit-ready.

What makes Missouri income tax unique?

Missouri is one of the many US states that levies a personal income tax, but at relatively low rates compared to others.

Because Missouri sits at the center of the US, it’s also a hub for remote and distributed work. Employers hiring across state lines should confirm where income is “sourced” for withholding purposes, especially for hybrid or out-of-state workers.

How income tax works in Missouri

Missouri has a progressive income tax that ranges from 0% to 4.70% depending on the individual’s taxable income and filing status.

Residency rules and filing status

Residency determines how Missouri income tax applies:

• Residents: Pay Missouri income tax on all income
• Part-year residents: Pay on income earned while living in Missouri
• Nonresidents: Pay tax only on Missouri-sourced income

Missouri recognizes the following filing statuses:

• Single
• Married filing jointly or separately
• Head of household
• Qualifying surviving spouse

Filing status affects brackets, deductions, and available credits. For remote or relocating employees, employers must update state withholding when an employee’s tax domicile changes.

More details are available on the Missouri DOR residency page.

2025 Missouri income tax rates

Local earnings taxes

Two Missouri cities—Kansas City and St. Louis—impose a 1% local earnings tax on income earned within city limits. Employers must withhold and remit these separately via local agencies.

When it comes to withholding and remitting taxes for employees in Missouri, employers must:

1. Register with the Missouri DOR for withholding.

2. Use official withholding tables and forms (see Form MO-W4 and Form MO-941).

3. Remit withholdings either quarterly or monthly, depending on payroll size.

Other employer-related taxes

Missouri income tax deductions and credits

Standard and itemized deductions

Missouri aligns its standard deduction amounts with the federal standard deduction for each filing status. Employees can also itemize deductions if it results in a lower tax liability.

Common tax credits

The Missouri DOR tax credit list includes:

• Champion for Children Tax Credit
• Youth Opportunities Tax Credit
• Diaper Bank Tax Credit
• Maternity Home Tax Credit
• Homestead Disaster Tax Credit
• Missouri Development Finance Board (MDFB) Infrastructure Tax Credit

Employers should direct employees to the DOR’s official site for current credit eligibility and claim procedures.

Filing and payment details

For individuals

• Form: MO-1040

• Deadline: April 15, 2026 (for 2025 tax year)

• File: e-file through DOR or by mail

• Pay: Online through DOR Pay Portal

For employers

1. Register with the Missouri DOR for withholding and with the Department of Labor for UI.

2. File quarterly returns (Form MO-941) and remit withheld taxes.

3. Pay UI taxes through the Missouri Division of Employment Security.

4. Report new hires within 20 days via the Missouri New Hire Reporting Center.

5. Maintain payroll records for state and federal audits.

What employers and workers should know about Missouri taxes

Payroll implications

Employers in Missouri must ensure payroll systems apply the correct state income tax brackets, local earnings tax (if applicable), and SUI rates. Regularly check for updates from the DOR, as Missouri occasionally adjusts rates or wage bases.

Multi-state and remote work considerations

If employees work remotely from Missouri, their income is Missouri-sourced, and withholding applies. Employers expanding or relocating should register for withholding and UI accounts in Missouri before processing the first payroll.

Business obligations

Beyond payroll withholding, companies operating in Missouri must manage:

• Sales and use tax filings for taxable goods/services
• Property and franchise taxes, where applicable
• City earnings taxes in Kansas City and St. Louis apply if employees work there

Automate Missouri payroll and compliance with Deel

Managing Missouri income tax and payroll compliance requires attention to rates, local earnings taxes, and filing deadlines. Employers that automate compliance reduce risk and save time, letting teams focus on growth instead of tax logistics.

Deel Payroll - US automates everything from Missouri income tax withholding to UI contributions, ensuring every paycheck meets DOR requirements.

For businesses wanting a hands-off compliance model, Deel PEO acts as the employer of record, managing tax filings, benefits, and HR administration across all 50 states.

Book a free 30-minute demo for a personalized platform walk–through and expert Q&A.