Mississippi Nonresident

[Snaggletooth]

Had my first Tunica winner last week. In years past, I have been able to file for a small refund unless taxpayers had significant income. They withhold 3% at the Casino.

This year, I can't get the MS amount withheld from W-2G to show up in Drake. I notice the MS nonresident form includes a line showing MS tax withheld, but allows for a W-2 only.

Is this a problem buried somewhere deep in the bowels of Drake, or has Mississippi just decided to withhold on a "flat tax" basis and not allow refunds from tax filers who win at their casinos??

[Redneck]

MS tax

Snag
The three(3)% withheld from gambling winning in the great state of MS is a service fee.
Gambling winnings are not taxable to MS. The 3% is a deduction on the clients state tax if they are a non resident.
Red

PS.
Check this out. http://www.mstc.state.ms.us/taxareas...ngWinnings.htm
And this. http://www.mstc.state.ms.us/taxareas...%20Patrons.pdf

[Chief]

Redneck

do you know anything about Redneck Bank? Other than it's an internet bank.

[Redneck]

No

do you know anything about Redneck Bank? Other than it's an internet bank.

No chief. I am just a redneck born in the great state of Mississippi

[ChEAr$]

More clarification on MS gambling tax. It is not a service fee, but a genuine excise
tax which may be deducted on schedule a OR, and this is important for states with
income tax unlike TN, but like AL, taken as a tax credit just like income tax paid to another state.

Naturally I use the latter approach.

[Redneck]

More info

From Mississippi web site

Gambling Winnings

Effective January 1, 2002, gambling winnings reported on a W2G, 1099, or other informational return from Mississippi casinos are subject to a three percent (3%) non-refundable income tax. The casinos withhold the tax at the time of payout. The amount withheld is non-refundable to the taxpayer. Section 27-7-901 of the Mississippi Code provides that the amount of winnings reported on W2G, 1099 or other informational return from Mississippi casinos are not to be included in Mississippi income and no income tax credit is allowed for the amount of withholding. A Non-Resident taxpayer with only Mississippi gambling winnings and/or losses should not file a Mississippi tax return. The document provided by the casino is considered the income tax return for this type of Mississippi income and therefore is proof that the tax was paid to Mississippi.

[Snaggletooth]

Thanks

Thanks to all for this clarification.

I remember MS used to withhold tax at 5%, and almost everyone with significant winnings would file a tax return and get half their money back. MS was processing literally hundreds of thousands of state tax returns, in fact, I'm told they were processing more non-residents than residents!!

Someone brilliant down there figured out if they withheld only 3%, very few would bother to file, so this is what they did. There were still returns filed and still refunds, but in most cases not enough of a refund to warrant the cost of paying a tax preparer extra to file for it.

So now it is a "service fee' - nonrefundable, per the Redneck post. Sounds like they've managed to avoid the tax filings entirely.

[David1980]

I wish more states would follow suit. I'm a fan of tax simplification, even if it is bad for my job's future.

[Snaggletooth]

VAT coming?

David, you may soon have your wish. They're talking about a VAT tax because the deficit is so horrendous.

This should appeal immensely to the so-called "Fair" tax advocates. A tax on every transaction. These "fair tax" advocates, however, wanted to replace the income tax with their "fair" tax. Little did they know that we may get their "Fair" tax IN ADDITION TO the income tax!!