Missouri Timely Compensation Deduction (Tax Credit)

This article covers Missouri's allowance for a tax credit for employer withholding taxes that are filed and paid in a timely fashion.

The Missouri Department of Revenue allows for a tax credit (a "timely compensation deduction") for timely filing and payments of employer withholding tax. 

Per the state of Missouri's tax guide:
Employers who are not government agencies or political subdivisions may receive a deduction if their Employer’s Return of Income Taxes Withheld (Form MO-941) is timely filed and timely paid. The timely compensation begins at 2 percent and is reduced to 1 percent once the employer’s year-to-date withholding reaches $5,000. The amount of compensation deduction is reduced to one-half percent once the year-to-date withholding reaches $10,000. For example, if my employer withholding tax is $4,000 for the month of January, I will receive a 2 percent timely compensation if timely filed and timely paid. If my February withholding tax is $4,000, (my year-to-date withholding tax would be $8,000), I will receive a 2 percent compensation deduction for $1,000 and a 1 percent compensation deduction for the remaining $3,000 of the February withholding tax if timely filed and timely paid.

For further information on this provision and other particulars of Missouri's state taxation, please see the State of Missouri Employer Tax Guide.