Mississippi Tax Form 80-105 - Resident Individual Income Tax Return Instructions

LEGISLATIVE CHANGES

Senate Bill 2562 provides that taxpayers required to notify the Internal Revenue Service of reportable transactions may be required to report these transactions to the Mississippi State Tax Commission and to maintain a list of these reportable transactions. A complete copy of these and other legislative bills are available at www.ls.state.ms.us.

PAYMENT INFORMATION

If you owe additional income tax and plan to pay with a paper check or money order, the check must be attached to a Payment Voucher, Form 80-106 to ensure crediting your account. Make sure you put your SSN on the payment voucher and the check or money order. DO NOT send cash through the mail.

You can now pay any tax due to the Mississippi State Tax Commission electronically from your bank account online at https://www.officialpayments.com/echeck You will need to have your bank rounting number and your checking account number to use this service. There is a convenience fee for this service.

You can also pay any tax due to the Mississippi State Tax Commission by credit card online at http://www.officialpayments.com or by phone at 1-800-272-9829. Discover/NOVUS, MasterCard, Visa, and American Express cards are currently being accepted. There is a convenience fee for this service.

Mississippi State Tax Commission has a number of Electronic Filing methods from which to choose, to make filing easier for you!

They’re faster than paper
They’re convenient
They’re easier to use
Some are even FREE!!!

PLEASE SEE PAGE 14 FOR MORE DETAILS OR VISIT OUR WEB SITE AT www.mstc.state.ms.us

FEDERAL/STATE ELECTRONIC FILING PROGRAM - Your professional tax practitioner can file both your federal and state returns by using the E-File program. Returns are more accurate and refunds are much faster when you file electronically. ASK YOUR TAX PREPARER ABOUT ELECTRONIC FILING.

FEDERAL/STATE ON-LINE FILING PROGRAM – Purchase the computer program from the store or over the internet and file electronically from the convenience of your home computer.

DIRECT DEPOSIT – Have your tax refund deposited directly into your bank account. This is available for Individual Income Tax Returns that are filed using the E-File program. Returns must be filed electronically through an approved tax preparer or through an on-line service provider.

Ask your tax preparer about direct deposit or visit our web site at www.mstc.state.ms.us for more information.

Mail your completed income tax return to:

Additional Tax Due (or No Tax Due)

OFFICE OF REVENUE
Post Office Box 23050
Jackson, MS 39225-3050

Refund Requested:

OFFICE OF REVENUE
Post Office Box 23058
Jackson, MS 39225-3058

You can visit our web site to answer many of the questions you may have and to obtain information regarding tax laws. Our address is www.mstc.state.ms.us.

You Should File a Mississippi Income Tax Return If Any of the Following Statements Apply to You:

You have Mississippi income tax withheld from your wages.
You are a Non-Resident or part-year resident with income taxed by Mississippi (other than gambling income).
Single Resident Taxpayers -You have gross income in excess of $8,300 plus $1,500 for each dependent.
Married Resident Taxpayers - You and your spouse have gross income in excess of $16,600 plus $1,500 for each dependent.
Minor Resident Taxpayers - You are a minor having gross income in excess of the personal exemption plus the standard deduction according to filing status.
Residents Working Out of State - You are a Mississippi resident working out of state (employee of interstate carriers, construction worker, salesman, offshore worker, etc). You must file a Mississippi return and report total gross income regardless of the source.
Residents Working Outside of the United States - You are a Mississippi resident employed in a foreign country on a temporary or transitory basis. Total gross income must be reported. If you qualify to exclude foreign wages for federal purposes, please enter this amount as a deduction on schedule N.
Deceased Taxpayer – If you are the survivor or representative of a deceased taxpayer, you must file a return for the taxpayer who died during the tax year or before the 2008 return was filed. A return for the deceased taxpayer should be filed on the form which would have been appropriate had he or she lived. Enter the word "deceased" and the date of death after the decedent's name on the return. Include the decedent's social security number in the space provided. If a refund of less than $500 is requested on the decedent's return, a refund may be paid, without the necessity of administration, to the decedent's surviving spouse, or in the absence of a surviving spouse, to a survivor in the order listed in Section 27-73-9, Mississippi Code of 1972. In either case, the survivor must complete and attach to the refund check an affidavit attesting to the fact that he or she is the rightful heir to the decedent's refund of Mississippi income tax. An affidavit of heirship, Form 80-605, may be obtained from the Office of Revenue of the State Tax Commission.

Am I a Resident or a Non-Resident?

An individual who maintains a home, apartment or other place of abode in Mississippi, or who exercises the rights of citizenship in Mississippi by meeting the requirements as a voter or who enjoys the benefits of homestead exemption, is a legal resident of the State of Mississippi and remains a resident although temporarily absent from the state for varying intervals of time. An individual remains a legal resident of Mississippi until citizenship rights are relinquished and a new legal residence is established. Changes in driver’s license, vehicle tags, voter registration, and property taxes show intent to change legal residence.

What is my status if I moved into or out of Mississippi in 2008?

You are a part-year resident. You must file the Non-Resident and Part-year Form 80-205. You will be taxed only on income earned while a resident of Mississippi and you will prorate your deductions and exemptions.

I am a full-year resident but my spouse is not. How should we file?

You must file a Mississippi Return Form 80-205 (Non-Resident Form).

The resident spouse will report to Mississippi income earned from ALL sources for the entire year. The spouse that is not a resident will report to Mississippi income earned in Mississippi, but will declare his or her total income for purposes of prorating the exemptions and deductions.

I am in the armed forces. What is my residency Status?

Mississippi Resident -If you enter the armed forces when you are a Mississippi resident, you do not lose your Mississippi residency status, even if you are absent from this state on military orders. You are subject to the same residency requirements as any other Mississippi resident and are required to file a Mississippi income tax return.

Non-Resident - If you are not a Mississippi resident but are stationed in this state by military orders, your military income is not subject to Mississippi income tax. However, if you have income subject to Mississippi tax, file Form 80-205 (Non-Resident Form). Mississippi does tax other income earned in this state by you or your spouse.

When should I file my return?

Calendar year 2008 - File on or before April 15, 2009. Fiscal year tax periods - File on or before the fifteenth (15th) day of the fourth month following the close of your tax year. Please write the fiscal year period and the words “Fiscal Year Return” in bold letters.

Need more time to file?

If you need more time to file your Mississippi return, and you will receive a refund or will not owe any additional tax, Mississippi will allow you the same time that is allowed by your federal extension.

If you expect to owe additional tax by the April 15 due date and you need more time to file your Mississippi income tax return, you must pay all of your state tax due with Mississippi Form 80-180 by April 15. The extension of time to file does not extend the due date for payment of your Mississippi income tax. More time to file does not mean more time to pay your taxes. You will owe interest and penalty from April 15 to date of payment. The interest rate is 1 percent (1%) per month and the penalty rate is ½ of 1 percent (.5%) per month or part of a month from April 15 until the date the final payment is received. Late payment penalty will accrue to a maximum of 25 percent (25%). Late payment penalty and interest apply to any unpaid tax after April 15.

The penalty imposed for failure to file a return is 5% per month not to exceed 25% in the aggregate. The penalty imposed for failure to file is based on the additional amount of tax due. Such failure to file a return penalty shall not be less than $100.

Who must file a declaration of estimated tax?

Generally, you must file a Declaration of Estimated Tax, Form 80-300, for the income tax year if you do not have at least 80 percent (80%) of your annual Mississippi income tax liability prepaid through withholding and your annual tax liability exceeds $200.

Underestimating the required amount of tax or failure to file estimated tax returns and pay the tax within the time prescribed will result in an assessment of interest of 1 percent (1%) per month on underpayment of tax from the date payment is due until paid. Form 80-320, Under-estimate of Tax-Individual, should be requested.

I am getting an income tax refund this year. When will I get my check?

ELECTRONIC return filers please allow ten days before calling about your refund. All other returns which are filed early are processed before and usually more quickly than returns filed closer to the due date. Ordinarily, within ten weeks after we receive your completed return we will mail your refund check. Therefore, allow at least TEN WEEKS for your refund to arrive before you contact us.

What tax records do I need to keep?

Keep a copy of your return with all attachments. Also, keep the original or a copy of any schedules or statements you used to prepare your return. Keep your records that support an item of income or a deduction appearing in a tax return until the statute of limitations for the return expires. The statute of limitations is generally three years from the date the return was due or filed, whichever is later.

Save any records concerning property, home, stocks, and business property you bought and may sell later. The records kept should show the purchase price, date and related cost. For real property, keep records showing the cost and date of improvements. Your return may be audited by the IRS or the Mississippi State Tax Commission. If audited, the law requires you to show proof of your income, expenses, and cost of assets. In the case of an audit by the IRS, the statute of limitations for adjusting your income tax return is extended for three more years beginning with the date the audit is disposed of by the IRS.

When should I file an amended Mississippi return?

File an amended return, Form 80-170, any time you need to correct your Mississippi return. In general, if you amend your federal return, you will need to amend your state return.

You may apply for a refund on an amended return within three (3) years of the original due date of the return (including extensions). If no return was originally filed, a refund may be requested by filing a return within three (3) years of the original due date for filing the return.

What if I am audited by the IRS?

If you receive a refund or owe additional federal tax, you should file an amended Mississippi return, Form 80-170, after the Internal Revenue Service disposes of the tax liability in question (See Sec.27-7-49 (3)).

Completing the Return

Use black ink when preparing this return. Copies or reproductions of the official form are not acceptable. If you have other forms, W-2s, or attachments, staple them to the back of your return. Follow the line instructions on the return. Additional specific instructions follow. DO NOT PLACE A STAPLE IN THE BARCODE.

Round all dollar amounts to the Nearest Dollar. Do not use cents.

All dollar amounts should be rounded to the nearest whole dollar (no pennies). Round down to the next lower dollar amounts under $.50 and round up to the next higher dollar amounts of $.50 and over. For example: $2.15 becomes $2.00; $4.75 becomes $5.00; and $3.50 becomes $4.00.

Taxpayer Information

Please make sure that you write in your name, address, and SSN. If you are married and filing a joint, combined, or separate return, write in the social security number for both you and your spouse. If spouse died in tax year, enter surviving spouse first as taxpayer.

Resident County Codes

Enter the code corresponding to your resident county on page 1 of the return (in the address area).

Filing Status and Exemptions

Mark an ‘X’ in the box applicable to your filing status on the last day of the tax year. After checking the applicable filing status, enter the corresponding dollar amount of exemption on Page 1, Line 12, (Dollar amount is shown next to the filing status you selected).

The exemption and standard deduction for each filing status for 2008 are listed on the following page.

Filing Status	Exemption	Standard Deduction
Married – Filing Joint or Combined Return	$12,000	$4,600
Married - Spouse Died 2008	$12,000	$4,600
Married - Filing Separate Returns	$6,000	$2,300
Head of Family Individual	$8,000*	$3,400
Single Individual	$6,000	$2,300

* Note: The additional $1,500 will be allowed in the calculation of the dependent exemption amount entered on Line 11.

Filing Status for Married Persons

Married persons may file tax returns in any of these three methods: (1) joint, (2) combined, or (3) separate. Choose the method which results in the least amount of tax.

(1) A joint return is usually completed when only one spouse has income. Place all income, deductions, exemptions, etc. in Column A (Taxpayer).

(2) A combined return is completed when both spouses have income. Place one spouse's income in Column A (Taxpayer) and the other spouse's income in Column B (Spouse). The exemptions and deductions may be divided in any manner you choose. If only one spouse has income, this income may not be split between husband and wife.

(3) Separate returns (two returns) are filed when each spouse completes his/her own return. Each spouse reports his/her own income and deductions on a separate return. BOTH spouses must file returns even though one spouse may have little or no income. If one spouse elects to itemize deductions, both must itemize. If one spouse elects to use the standard deduction, both must use the standard deduction. Each spouse is entitled to only one-half of the total exemption authorized. Each spouse must list the other spouse on his/her return.

Itemized Deductions

You may choose to either itemize individual non-business deductions or claim the standard deduction for your filing status, whichever provides the greater tax benefit.

State income taxes, or any other taxes allowed for federal purposes in lieu of state income tax, including taxes withheld on Mississippi gaming winnings, are not deductible on your itemized deductions schedule. See the instructions for Schedule A on Page 12.
Losses incurred at Mississippi gaming establishments are not deductible on your Mississippi itemized deduction schedule.
Married individuals having separate income and filing a combined return may divide their itemized deductions in any amount between them.

Standard Deductions and Exemptions

Married - Filing Joint or Combined Return. The standard deduction ($4,600) and the authorized exemption ($12,000) may be divided between the spouses in any manner they choose when filing a combined return.

Married - Filing Separate (two returns). Each individual must claim the authorized exemption ($6,000) and the standard deduction ($2,300). Any unused portion of the standard deduction ($2,300) by one spouse on his/her separate return may not be used by the other spouse on his/her separate return.

Filing Status and Exemptions Lines 1-6

Line 1 - Married - Combined or Joint Return

Enter $12,000 on Line 12

A married individual is a person who was legally married on the last day of the tax year. The filing status exemption for married individuals is a joint exemption and in the case of husband and wife filing a joint or combined return (one return), the exemption may be claimed by either or divided between them in any manner they choose to the extent that the total amount of exemption claimed by husband and wife does not exceed the total exemption authorized ($12,000). Mississippi law does not recognize common law marriages entered into after April 5, 1956.

Line 2 - Married - Spouse died in 2008

Please enter surviving spouse first as taxpayer.

Enter $12,000 on Line 12

Use this filing status if your spouse died in 2008, and you did not remarry in 2008. Report your spouse's income before death and your income for all of 2008. Write "deceased" and the date of death beside spouse's name on the return. List surviving spouse’s name and SSN first (your SSN) when completing form.

Line 3 - Married - Filing Separate Returns

Enter $12,000 on Line 12

Mississippi law provides that married individuals filing separate returns (two returns) shall divide equally between the two spouses the total exemptions authorized. If the box on Line 3 is checked, the only deduction you may claim for exemptions is one-half of the amount indicated on Line 13. Checking the box Married -Filing Separate Returns implies that both husband and wife will file separate returns regardless of the amount or source of income of each. Any unused portion of the exemptions on one return may not be claimed on the other. If you elect to file separate returns, enter the Spouse's Name and Spouse's SSN in the Heading of the return.

If this computation produces an inequity, it is suggested that married individuals check the box on Line 1 and file one combined return, so the filing status and additional exemptions may be divided between the spouses in any manner they choose. If you elect to file jointly, enter the Spouse's Name and Spouse's SSN in the Heading of the return.

Line 4 - Head of Family Individuals

Enter $8,000 on Line 12

A Head of Family individual is a taxpayer who is single and who maintains a household which constitutes the principal place of abode for himself or herself AND one or more dependents. A married individual must live apart from his/her spouse for the entire year to qualify for Head of Family filing status.

If the dependent does not live in the same home with the taxpayer, such taxpayer does not qualify as head of family even though the taxpayer may contribute to the support and maintenance of a separate household for the dependent.

You must have a dependent of yours living in the home with you for the entire year to file as head of family. By checking Line 4 of the tax return to file as head of family, you are allowed $8,000 and on Line 6 you are allowed $1,500 for the required dependent, which totals $9,500 for your head of family status exemption. If you have any more dependents, list them on the additional lines available on Line 6.

Line 5 - Single Individuals

Enter $6,000 on Line 12

A single taxpayer status is allowed for a person who is not married or who is married but legally separated from his/her spouse on the last day of the tax year.

Additional Exemptions

The additional exemptions are as follows:

Each dependent, other than yourself or your spouse.…$1,500
Age 65 or over, taxpayer or spouse only..................$1,500
Blind, taxpayer or spouse only ……..………………...……..$1,500

An additional exemption may be claimed for a taxpayer and/or spouse ONLY if blind or age 65 or over. The status on the last day of the tax year will determine the additional exemptions authorized except in the case of death of a spouse or dependent.

Line 6 - Dependents

Enter the dependent’s name, the dependent’s relationship to you, and the dependent’s Social Security Number. A dependent is a relative or other person who qualifies for federal income tax purposes as a dependent of the taxpayer. A dependency exemption is not authorized for yourself or your spouse.

An additional exemption may be taken by the taxpayer for each authorized dependent claimed. You must enter the SSN and relationship for each dependent claimed on your tax return.

Line 7 - Age and Blindness

If the taxpayer or spouse is age 65 or over, or blind, an additional exemption may be claimed. Mark an ‘X’ in the applicable box(es) on Line 7 and enter on Line 9 the number of boxes checked. For tax purposes, a person is 65 years of age on the day before his 65th birthday. No additional exemption for age or blindness may be claimed for dependents.

Line 8 - Number of Dependents Claimed

Enter the number of dependents claimed on Line 6.

Line 9 - Number of Age and/or Blindness Exemption(s)

Enter the number of boxes checked on Line 7.

Line 10 - Total Additional Exemptions Claimed

Enter the total of dependents claimed on Line 8 plus age and/or blindness exemptions on Line 9.

Line 11 - Total Additional Exemption(s) Amount

Multiply line 10 by $1,500 and enter the result on Line 11.

Line 12 - Filing Status Exemption

Enter the dollar amount corresponding to the Filing Status you selected from Lines 1 through 5.

Line 13 - Total Filing Status/Additional Exemption Amounts

Add the amounts from Line 11 and Line 12. Enter on Line 13.

Line 14 - Total for Married-Filing Separate Returns

If your filing status is Married-Filing Separate Returns, enter one half of the amount on Line 13.

Line 15 - Wages, Salaries, Tips, Etc.

Show the total of all wages, salaries, fees, compensation, commissions, tips, bonuses, and other amounts your employers paid you before they deducted taxes, insurance, etc. Include in this total:

The amount shown on your Wage and Tax Statements (Form W-2s) in the box "Wages, tips and other compensation."
Wages you received but for which you do not have a Wage and Tax Statement.
Tips you did not report to your employer.
Fair market value of meals and living quarters if given by your employer as a matter of your choice and not for your employer's convenience.
Strike and lockout benefits paid by a union from union dues, including both cash and the fair market value of goods received, unless the facts clearly show that such benefits were intended as a gift.

Include all W-2s with your return. Staple the W-2s to the back of your return.

Line 16 - Other Income

Complete Schedule of Other Income on Page 2 of Form 80-105. Enter the total amount from Schedule of Other Income, Page 2, Line 46 here.

See the instructions that follow for completing Schedule of Income, Page 2, Lines 36 through 46

Schedule of Other Income Lines 36-46 (Page 2)

Note: Differences may exist between the amount of state taxable income entered on this form and the amount of federal taxable income entered on form 1040, 1040A, etc. In such cases a reconciliation must be provided. This can be accomplished in one of two ways. The first method is to enter the amount per the federal return for the corresponding line item (e.g. line 36 - Schedule C income) on the Mississippi return. A separate adjustment is recorded on Schedule N identifying the difference(s) between federal and state reportable income (e.g. Bonus Depreciation Adj. - Schedule C - 1). The alternative is to enter the amount of Mississippi reportable income on the appropriate line (e.g. line 39 - Farm Income) and attach a separate schedule reconciling the federal amount, the item(s) of difference, and the state amount reported on page 2 of Form 80-105.

Note: On Form 80-205, married individuals with separate incomes electing to file a combined return (both spouses having earned incomes) should combine their incomes beginning with line 34, and throughout the schedule to determine Total Income from All Sources and Incomes Earned in Mississippi Only.

Line 36 - Business Income or Loss

Enter your profit or loss if you owned a business or practiced a profession. If you had more than one business, or if you and your spouse had separate businesses, complete a Schedule C for each business. If the Mississippi net profit or loss amount varies from the Federal Schedule C net profit or loss, then provide a reconciliation. If you enter the federal amount on this line, but there is a difference between Mississippi and federal amounts, enter the adjustment on Schedule N. The federal Schedule C must be attached to your return.

If some of your expenses are part business and part personal, you can only deduct the business part as a business expense.

Line 37 - Capital Gain or Loss

Enter the amount of capital gain or loss. Mississippi generally follows IRS rules concerning computation of capital gains and losses. Capital loss deductions are subject to the same limitations as federal. However, Mississippi does not have different tax rates for capital gains. All income is taxed at the same rate. Gains from the sales of ownership interests must first be reduced by the amount of any losses determined from sales or transactions described in section 27-7-9(f)(10)(A). If the amount reported on this line is different than the amount reported for federal purposes, a reconciliation should be attached. If you enter the federal amount on this line, but there is a difference between Mississippi and federal amounts, enter the adjustment on Schedule N. The federal Schedule D must be attached to your return.

Line 38 -Rental Real Estates, Royalties, Partnerships, S Corporations, Trusts, etc.

Enter the income or loss from activities reported on Federal Schedule E on this line. If the amount reported is different than the amount reported for federal purposes then attach a reconciliation. If you enter the federal amount on this line, but there is a difference between Mississippi and federal amounts, enter the adjustment on Schedule N. The federal Schedule E must be attached to your return.

Line 39 - Farm Income or Loss

Enter the net farm income or loss on this line. If you are a farmer or rent your farm on shares, attach Federal Schedule F to your tax return.

If the amount reported is different than the amount reported for federal purposes then attach a reconciliation. If you enter the federal amount on this line, but there is a difference between Mississippi and federal amounts, enter the adjustment on Form 80-108, Schedule N.

Farm losses claimed by persons who do not devote full time to farming will not be allowed unless such person can clearly establish the fact that he is in the business of farming for gain or profit. The federal Schedule F must be attached to your return.

Line 40 - Interest Income

Complete Form 80-108, Page 1, Schedule B, Lines 1 - 3. Enter interest received or credited to your account during the tax year on bank deposits, notes, mortgages and corporation bonds. Interest on bonds is considered income when received or credited. Interest income from obligations of the U.S. Government, the State of Mississippi and subdivisions thereof, is exempt. Interest on obligations of other countries, states, cities, or political subdivisions outside Mississippi is taxable.

Line 41 - Dividends

Complete Form 80-108, Page 1, Schedule B, Lines 4 -6. Report the amount of all dividends received during your tax year. Dividends include distributions of money as well as property.

Line 42 - Alimony Received

Enter the amount received as alimony and separate maintenance payments. The recipient of alimony must include the amount received in gross income.

For Alimony Paid, see the instructions for Line 50.

Line 43 - Total Pensions and Annuities

Enter the total amount of taxable pensions and annuities received on this line. Pensions and annuities that are taxable as early or excess distributions under the Federal Internal Revenue Code (see Federal Form 5329) do not qualify for exemption from Mississippi income tax. Such income should be reported on this line as taxable income. Separation pay is not retirement income and does not qualify for exemption. Deferred compensation plan distributions received prior to attainment of retirement age and/or service requirements are taxable for Mississippi purposes and should be reported on this line. Do not report Social Security benefits, annuity benefits received under the federal Railroad Retirement Act, or retirement income on this line. Social Security benefits, Railroad Retirement benefits, and retirement income from federal, state, and private retirement systems are exempt in total.

Line 44 - Unemployment Compensation

Enter from Form(s) 1099-G the amount of unemployment compensation received in 2008. Unemployment compensation is taxable for Mississippi income tax purposes.

Line 45 - Other Income or Loss

Enter the amount from Form 80-108, Schedule N.

Line 46 - Total Other Income or Loss

Add Lines 36 through 45. Enter the total on this line. Carry amount on Line 46 to Form 80-105, Page 1, Line 16. NR Return: Add Lines 34 through 44 of both columns "Total Income From All Sources" and "Mississippi Income ONLY". Enter the totals on this line.

Adjustments to Gross Income

Line 17 - Adjustments to Gross Income

Complete the Schedule of Adjustments to Gross Income on Page 2 of your return. Enter the total adjustments from Page 2, Line 56, here. An adjustment claimed on this line requires attachment of a schedule or other detailed explanation of the adjustment. See the following instructions for Schedule of Adjustments to Gross Income, Lines 47 through 55.

Instructions for Schedule of Adjustments to Gross Income (Page 2)

NOTE: On Form 80-205, married individuals with separate incomes electing to file a combined return (both spouses having earned income) must combine their adjustments beginning with Line 46, and continue throughout the schedule to determine Total Income from All Sources and Incomes Earned in Mississippi Only. Non-Resident or part-year residents not reporting total income to Mississippi are entitled to claim that portion of certain adjustments in the ratio that income from sources within Mississippi ( Line 45, Mississippi Only Income) bears to total income from all sources (Line 45, Total Income From All Sources). The ratio determined cannot exceed 100%. Adjustments that must be prorated are (a) Payments to an IRA (Line 46); (b) Payments to self-employed SEP, SIMPLE, and qualified plans (Line 47); (c) Alimony Paid ( Line 49); (d) Moving Expenses (Line 50); Self-Employed Health Insurance Deduction (Line 53), Health Savings Account Deduction (Line 54). An adjustment in this section requires attachment of a schedule or other detailed explanation. An example is provided on the following page.

Example: John and Mary Johnson moved from Arkansas to MS in October of 2008. Together they had $2,000 of qualified unreimbursed moving expenses. In completing the return, John and Mary had total income of $50,000 (line 45, left column) and total Mississippi income of $20,000 (line 45, right column).

On line 50, moving expense, the $2,000 of qualified unreimbursed moving expenses is entered in the left column. On line 50, moving expense, $800 ($2,000 X (20,000/50,000)) is entered in the right column (Mississippi column).

Line 47 - Payments to an IRA

You may deduct payments to an IRA to the extent that such payments are deductible for federal income tax purposes Use the worksheet in your federal income tax instructions to figure your deduction for payments to an IRA. See Note above concerning proration.

Line 48 - Payments to self-employed SEP, SIMPLE, and Qualified Plans

You may deduct contributions to Self-Employed Retirement Plans to the extent that such contributions are deductible for federal income tax purposes. If the contributions, or any part thereof, are not deductible for federal income tax purposes, they are not deductible for Mississippi income tax purposes. See Note above concerning proration.

Line 49 - Interest Penalty on Early Withdrawal of Savings

Federal Form 1099-INT given to you by your bank or savings and loan association will show the amount of any interest penalty you were charged because you withdrew funds from your time savings deposit before its maturity. The amount of such penalty is deductible.

Line 50 -Alimony and Separate Maintenance Paid

Alimony payments you made are deductible to the extent allowable for federal income tax purposes. You must complete Schedule P, Page 2 of your return. Include the name, social security number and state of residency of the individual to whom the alimony was paid. See Note above concerning proration.

Line 51 - Moving Expense

You may deduct moving expense(s) as an adjustment to gross income to the extent allowable for federal income tax purposes. Attach a copy of Federal Form 3903 or 3903F. If your move was interstate, then a prorated amount of moving expense is deductible on the non-resident/part-year return form For an example, see general instructions for lines 46 -54 at top of the page.

Line 52 - National Guard and Reserve Pay

Enter the lesser of the National Guard or Reserve pay or the $15,000 Statutory Exclusion per taxpayer. Compensation which qualifies for exclusion is that received for inactive duty training (monthly or special drills or meetings), active duty training (summer camps, special schools, cruises) and for state active duty (emergency duty). Full-time National Guard pay is not allowed an exclusion. Report National Guard or Reserve pay on Line 15.

Line 53 - MPACT - MS Prepaid Affordable College Tuition Program and/or MACS - MS Affordable College Savings

Enter the prepaid tuition contract (MPACT) costs you paid during 2008 to the Mississippi Treasury Department on behalf of a student beneficiary and/or the amount contributed to a MACS Program account on behalf of a qualified beneficiary. Under the MACS Program, the maximum annual contribution deductions are $20,000 for joint filers and $10,000 for single and other filers. Contributions must be made on or before the deadline for making contributions to an IRA under federal law for such years (by the due date of the return, not including extensions.) Only amounts contributed to these programs are excluded from Mississippi income.

Line 54 - Self-Employed Health Insurance Deduction

Enter the amount of the Self-Employed Health Insurance Deduction you claimed on your Federal income tax return. See Note above concerning proration.

Line 55 – Health Savings Account Deductions

Enter the amount deposited into a health savings account plus any accrued interest as defined in the Health Savings Account Act. Any amounts withdrawn other than for the purpose of paying qualified medical expenses or to procure health coverage shall be included in gross income.

Line 56 - Total Adjustments to Gross Income

Add Lines 47 through 55. Enter the total here and on Line 17, Page 1, of Form 80-105.

Line 18 - Mississippi Adjusted Gross Income

Enter Line 15 plus Line 16 minus Line 17. On Form 80-205, enter amount from Line 56 or 57, as appropriate.

Deductions

Line 19 - Standard or Itemized Deductions

You may choose to either itemize individual non-business deductions or claim the standard deduction for your filing status, whichever produces the greater tax benefit. In the case of married individuals filing separate returns, one spouse may itemize only if the other spouse itemizes. If one spouse claims the standard deduction on a separate return, the other must claim the standard deduction.

(1) Itemized Deductions. State income taxes or any other taxes allowed for Federal purposes in lieu of state income tax are not deductible on your itemized deductions schedule. This also includes the non-refundable income tax withheld on gaming winnings. See instructions for Schedule A (Itemized Deductions). Married individuals having separate income and filing a combined return may divide their itemized deductions in any manner they choose for column A and column B. Mississippi Gaming Losses are not deductible on Mississippi itemized deductions.

(2) Standard Deduction. In lieu of an allowance for itemized personal deductions, you may claim an allowance for the standard deduction. Refer to the table on page 4 for the amounts of standard deduction allowances.

Married individuals having separate incomes and filing a combined return (one return), may divide the authorized standard deduction ($4,600) between the spouses in any manner they choose for column A and column B. Married individuals filing separate returns (two returns) and electing to claim the standard deduction must EACH claim the amount specified - any unused portion of the standard deduction by one spouse on his separate return may not be used by the other spouse on her separate return. Enter the amount of your itemized or standard deduction on page 1, Line 19.

Line 20 - Amount of Exemption

Enter the amount from Line 13, or Line 14 if filing Married-Filing Separate.

Line 21 - Mississippi Taxable Income

Subtract Lines 19 and 20 from Line 18 and enter the result on Line 21. The amount of income tax due is calculated on this amount, using the Schedule of Tax Computation on page 2 of the return.

Line 22 - Total Income Tax Due

Using the taxable income amount(s) from Line 21, the Tax Computation Schedule should be completed to determine the total Mississippi income tax liability. If Married Filing Joint or Combined, or Married - Spouse Died in Tax Year, filing status is elected, and the amounts in both Column A and Column B are positive amounts, use Column A (Taxpayer) and Column B (Spouse) of the Tax Computation Schedule to compute the tax liability on Line 5. If Married Filing Joint or Combined, or Married - Spouse Died in Tax Year, filing status is elected, and the taxable income on Line 21 of either Column A or B is a positive amount, and the taxable income on Line 21 of the other column is a negative amount, the positive and negative amounts should be combined. If a net positive amount results, the tax liability should be computed on the net amount using Column A of the Tax Computation Schedule. If combining the positive and negative amounts reflected in Column A and Column B results in a negative amount, there will be no income tax liability. If the amounts shown on Line 21, Columns A and B, are both negative, there will be no income tax liability. The tax liability for taxpayers using any other filing status should be computed using Column A (Taxpayer) of the Tax Computation Schedule. Enter the amount from Line 5 of the Tax Computation Schedule on Line 22, Page 1, of the tax return.

Credits

Line 23 - Mississippi Income Tax Withheld

Add the amounts shown as "MS Income Tax" withheld on your Forms W-2 and Federal Forms 1099 and/or 1099-R. Enter the total amount withheld on Line 23.

Tax withheld on gaming winnings cannot be claimed as Mississippi income tax withheld.

Staple readable copies of your Forms W-2 to the back of the return. Copies of your Forms W-2 are available only from your employer. Also attach any other forms (1099, etc.) which have Mississippi withholding to the back of the return. The withholding credit may be disallowed if W2s are not attached to return.

Line 24 - Estimated 2008 Tax Payments and/or Amount Paid with Extension

Enter the total estimated tax payments you made before filing your 2008 Mississippi tax return plus any amount credited from your 2007 tax return. Any amount paid with a request for extension of time to file should also be included in this amount.

Line 25 - Credit for Income Tax Paid to Another State

If you are a resident of Mississippi who earns income in another state and are required to pay an income tax to that other state, you are allowed to take a credit against your Mississippi income tax due in the same year for the total income tax due to the other state (subject to certain limitations).

In order to be allowed this credit, you MUST file an income tax return with the other state, and attach a copy of this return to your Mississippi return. The withholding amounts shown on your W-2 forms are NOT the same as actual tax paid to the other state. Copies of withholding statements are not sufficient to establish the credit.

Section 27-7-77 provides for three limitations which are:

The credit may not exceed the amount of income tax due the State of Mississippi, indicated on Line 22;
The credit may not exceed the amount of income tax actually paid to the other state; and
The credit may not exceed an amount computed by applying the highest applicable Mississippi rates to the net taxable income reported to the other state. Highest rates are meant to mean the highest rates at which the net taxable income reported to the other state is taxable by the State of Mississippi.

Line 26 - Other Credit(s)

All other allowable credits should be combined and the total entered on this line. For each type of credit taken enter the applicable two digit code as provided below.

Income Tax Credit Codes

01	Financial Institution Jobs Credit
02	Premium Retaliatory Tax Credit
03	Finance Company Privilege Tax Paid for Same Tax Year
04	(Repealed) Credit for Advanced Technology or Enterprise Zone
05	Jobs Tax Credit
06	National or Regional Headquarters Credit
07	Research and Development Skills Credit
08	Child/Dependent Care Credit (Employers only)
09	Basic Skills Training or Retraining Credit
10	Reforestation Credit
11	Credit for Gambling License Fee Based on Gross Revenue
12	Import Port Charges Credit (House Bill 829, 2008 Legislative Session)
13	MS Business Finance Corp. Revenue Bond Service Credit (Sec. 27-7-22.3)
14	Ad Valorem Inventory Tax Credit
15	Export Port Charges Credit
16	Guaranty Credit
17	Job Development Assessment Fee
18	Land Donation Credit
19	Broadband Technology Credit
20	Motion Picture Incentive Act Credit (House Bill 1780, 2008 Legislative Session)
21	BrownField Credit (Sec. 27-7-22.16)
22	Airport Cargo Charges Credit (Sec. 27-7-22.5)
23	Manufacturer’s Investment Tax Credit (Sec. 27-7-5)
24	Producer of Alternative Energy Job Credit (Sec. 27-7-5)
25	Child Adoption Credit (Sec. 27-7-22.32)
26	Historic Structure Rehabilitation Credit (Sec. 27-7-22)
27	Long Term Care Credit (Sec. 27-7-22.33)
28	New Markets Tax Credit (Sec. 57-105-1)

General restrictions on the use of income tax credits on a Mississippi individual income tax return. Most often these credits will be passed through from an entity filing a Mississippi Partnership or S Corporation tax return.

The following will show the maximum credit allowed. There are no provisions for refunding any excess credit if the credit is more than the income tax liability. Some of the credits do allow the unused portion to be carried forward for a period of time. If a taxpayer has more than one credit and/or more than one type of credit, he may use the credits in any sequence so as to obtain the greatest tax savings.

Ad Valorem Inventory Tax Credit -This credit is limited to the lesser of $5,000.00 per location or the income tax attributable to the location paying the Ad Valorem tax. This credit can be acquired in two ways, the first would be from a pass through entity and the second from a business whose income is being reported using a Schedule C in the individual tax return (if the credit is from a Schedule C then attach a copy of the Ad Valorem tax bills). This credit is calculated as follows: Multiply the net income passing through from the entity or the income off the Schedule C by the effective tax rate/rates (starting at your highest effective tax rate then work down if some of the business income is taxed at 4% and/or 3%). Unused credit may not be carried forward. Any expenses on which the credit is calculated must be added back to taxable income.

Jobs Tax Credit, National or Regional Headquarters Credit, Research and Development Skills Credit - These credits combined are limited to 50% of the income tax that is attributable to income derived from operations in the state for a year. The allowable credit is calculated as follows: Multiply the net income passing through from the entity by the effective tax rate/rates (starting at your highest effective tax rate then work down if some of the business income is taxed at 4% and/or 3%); then multiply by the 50% limitation. Any unused credit may be carried over for 5 years.

Job Development Assessment Fee - Employees whose wages have been assessed to help pay for Business Finance Corporation issued bonds which created their jobs, may claim a credit against their income taxes. Job Development Assessment Fee amounts are shown in the city or local income tax withholding block on the W-2 form, with the word RED for the city or local name. Credit amounts which exceed the tax due are not refundable and may not be carried forward to another tax year.

Reforestation Tax Credit - This credit, based on the costs incurred for certain approved reforestation practices, is an amount equal to the lesser of fifty percent (50%) of the actual cost of approved practices or fifty percent (50%) of the average cost of approved practices as established by the Mississippi Forestry Commission. In any taxable year, the credit shall not exceed the lesser of $10,000 or the amount of income tax imposed upon the eligible owner for the taxable year reduced by the sum of all other credits allowable to the eligible owner (except for withholding credits, estimated tax payments, and/or credit for tax paid to another state). The maximum reforestation tax credit that an eligible owner may utilize during his lifetime is $75,000 in the aggregate. Any unused portion of the credit may be carried forward to succeeding years. Generally, reforested acreage on which the eligible owner receives any state or federal cost share assistance funds to defray the cost of an approved reforestation practice is not eligible for the credit, unless the eligible owner's adjusted gross income is less than the federal earned income credit level. Unused credit may not be carried forward. Any expenses on which the credit is calculated must be added back to taxable income.

Long Term Care Credit -Effective January 1, 2007, there is a credit available against individual income taxes for premiums paid during the taxable year for certain qualified long term care insurance policies as defined in Section 7702B of the Internal Revenue Code. The credit available is twenty-five percent (25%) of premiums paid during the taxable year not to exceed $500 or the taxpayer’s income tax liability, whichever is less, for each qualified long term care insurance policy. No carry forward is allowed for any unused portion.

You may visit our web site at www.mstc.state.ms.us for information on other credits and their limitations. Other credits include Enterprise Zone Credit, Business Child/Dependent Care Credit, Basic Skills or Training Credit, Finance Company Privilege Tax Credit, Mississippi Business Finance Corporation Revenue Bond Service Credit, Export Port Charges, Temporary Assistance for Needy Families (TANF) Credit. NOTE: The Business Child/Dependent Care Credit referred to above IS NOT the same credit that is allowed for federal income tax purposes. The credit referred to here is allowable to employers who provide facilities for the care of dependents of their employees.

Line 27 - Total Credits

Add the amounts on Lines 23, 24, 25, and 26. Enter the total on this line.

Refund or Balance Due

Line 28 - Overpayment

If Line 27 is larger than Line 22, subtract Line 22 from Line 27 and enter the overpayment of tax on Line 28.

Line 29 - Credit to Estimated Tax

Enter on Line 29 the amount of your overpayment you wish to be credited to your 2009 estimated tax account. This amount will not be mailed to you.

Line 30 - Voluntary Contributions Check-Offs

You may contribute all or part of your 2008 income tax refund to one or more of the six (6) funds approved by the Legislature. Enter both the amount of contribution for each fund and the total on this line. A worksheet is provided on page 11.

Your contribution may be claimed as a tax deductible charitable contribution on your state and federal income tax returns. Once your return is filed, your contribution is final and cannot be refunded.

Line 30(J) -Contributions to the Mississippi Military Family Relief Fund. You may elect to contribute all, or any portion, of your income tax refund (at least $1) to the Mississippi Military Family Relief Fund. If you are due a refund and wish to contribute to the Mississippi Military Family Relief Fund, please write the amount you wish to donate on Line 30 J. This fund is to provide grants to families that experience a financial hardship as a result of a family member who is a Mississippi resident and who is a member of the Mississippi National Guard or the reserves of the Armed Forces of the United States being called to active duty as a result of September 11, 2001, terrorist attacks.

Line 30(K) - Contributions to Mississippi Commission for Volunteer Service Fund. You may elect to contribute all or part (at least $1) of your income tax refund to the Mississippi Commission for Volunteer Service Fund. These refund donations may be expended by the Mississippi Commission for Volunteer Services to advance community service and volunteer is m among Mississippians.

If you are due a refund and wish to contribute to the Mississippi Commission for Volunteer Services Fund, please write the amount you wish to donate on Line 30(K).

Line 30(L) -Contributions to the Mississippi Wildlife Heritage Fund. You may elect to contribute all or part (at least $1) of your income tax refund to the Mississippi Wildlife Heritage Fund. These refund donations are used to study, protect and manage our non-game wildlife, endangered species and special natural areas.

Since 1986, when the Wildlife Heritage Fund was established, tax refund contributions have been used to: (1) fund more than one hundred research projects which produced valuable information on rare plant and animal species; (2) reintroduce bald eagles to our state's barrier islands; (3) record and publish the songs and sounds of Mississippi's birds and frogs; and (4) help rehabilitate injured birds of prey. If you are due a refund and wish to contribute to the Wildlife Heritage Fund, please write in the amount you wish to donate on Line 30(L). If you are not due a refund, but wish to contribute, make a check or money order payable to the Wildlife Heritage Fund and mail it to the Mississippi Department of Wildlife, Fisheries and Parks, P. 0. Box 451, Jackson, MS 39205-0451.

Line 30(M) -Contributions to the Mississippi Educational Trust Fund. You may elect to contribute all, or any portion, of your income tax refund (at least $1) to the Mississippi Educational Trust Fund. If you are due a refund and wish to contribute to the Mississippi Educational Trust Fund, please write the amount you wish to donate on Line 30(M).Your donation is tax deductible and will be placed in this trust fund which will be used for the improvement of education within the State of Mississippi.

The principal of the trust fund shall remain inviolate and shall be invested as provided by general law. Interest and income derived from investment of the principal of the trust fund may be appropriated by a majority vote of the elected membership of each house of the Legislature and expended exclusively for the education of the elementary and secondary school students and/or vocational and technical training in this state.

Line 30(N) - Contributions to Mississippi Wildlife Fisheries and Parks Foundation. You may elect to contribute all or part (at least $1) of your income tax refund to the Mississippi Wildlife Fisheries and Parks Foundation. These refund donations are used to build, upgrade, and/or improve our Fisheries and Parks managed by the Mississippi Wildlife Fisheries and Parks Commission.

If you are due a refund and wish to contribute to the Mississippi Wildlife Fisheries and Parks Foundation, please write the amount you wish to donate on Line 30(N).

If you are not due a refund, but wish to contribute, make a check or money order payable to Mississippi Wildlife Fisheries and Parks Foundation. The mailing address is Mississippi Department of Wildlife, Fisheries and Parks, P. 0. Box 14194, Jackson, MS 39236.

Line 30(Z) -Contributions to Mississippi Burn Care Fund. You may elect to contribute all or part (at least $1) of your income tax refund to the Mississippi Burn Care Fund. If you are due a refund and wish to contribute to the Mississippi Burn Care Fund, please write the amount you wish to donate on Line 30(Z). Donations to the Fund will be forwarded to the Burn Center for use in its operations.

Voluntary Contribution Check-Off Worksheet

J. Mississippi Military Family Relief Fund	$
K. Mississippi Commission for Volunteer Service Fund	$
L. Mississippi Wildlife Heritage Fund	$
M. Mississippi Educational Trust Fund	$
N. Mississippi Wildlife Fisheries and Parks Foundation	$
Z. Mississippi Burn Care Fund	$
Enter total of lines J, K, L, M, N, & Z here and on line 30, Form 80-105.	$

Line 31 -Net Overpayment to be Refunded to You

Subtract lines 29 and 30 from line 28. Subject to correction of error, this is the amount of your refund. Please allow at least ten weeks to process your refund, perhaps longer if filed near April 15 or if you have a prior delinquency. The refund will be mailed to the address on your return. No refund will be made for amounts less than $1.00 unless specifically requested.

If the State Tax Commission is notified of a debt in excess of $25 by the State Department of Human Services, an Educational Board, Educational Institution, Educational Loan Agency, State Department of Medicaid, or Mississippi Department of Employment Security Commission, a portion or all of your refund may be offset in payment of that debt.

Line 32 - Balance Due

If the total credits on Line 27 are less than the total tax on Line 22, subtract Line 27 from Line 22 and enter the balance due on this line.

Line 33 - Interest on Underestimate of Estimated Tax Payments

An individual taxpayer is subject to making estimated tax payments if such taxpayer does not have at least 80% of his/her tax liability withheld through wages subject to withholding and such liability exceeds $200.

Interest should be entered on this line if you fail to file the required estimated tax return and pay the tax within the prescribed time, or if you underestimated the required amount. The interest due is computed at the rate of 1% per month on the underpayment of tax from the date payment is due until paid.

If you are subject to making estimated tax payments, use Form 80-320 to calculate the interest, or to determine if you qualify for an exception. If you have a refund but are subject to interest on underestimate, reduce the refund amount by the interest on underestimate.

Line 34 - Interest and Penalty

Enter the amount of interest and penalty due on late payment of the tax. An extension of time only extends the time for filing a return, not payment of the tax. If the income tax is not paid by the original due date of the return, then interest is due at the rate of 1% per month.

Penalties are imposed for failure to file a return or pay the tax when due. The penalty imposed for failure to pay the tax when due or on additional tax due is 1/2% per month not to exceed 25% in the aggregate. The penalty is based on additional tax due. Interest and penalty for late payment is not charged on interest and penalty on underestimated income tax payments.

The penalty imposed for failure to file a return is 5% per month not to exceed 25% in the aggregate. The failure to file penalty is based on the additional amount of tax due, not total tax due on the return. Such failure to file penalty shall not be less than $100.

Line 35 - Total Due

Add lines 32, 33, and 34. Enter the amount on this line. This is the amount you owe. You must pay the FULL AMOUNT of your income tax due when you file your return (or before the due date of April 15).

Payments should be made by check or money order payable to the State Tax Commission. Do not send cash by mail. BE SURE TO ENCLOSE PAYMENT VOUCHER, FORM 80-106, WITH YOUR PAYMENT. You may pay your tax in person at any of the State Tax Commission district offices. Balances due of less than $1.00 need not be paid.

Signature and Date

Signature and Date You must sign your tax return. You have not filed a legal return unless you sign it and date it. If you and your spouse are filing a joint or combined return, both of you must sign even though only one had income. If your return was prepared by someone else, that person must sign the return as the preparer. No refunds will be made unless the return is properly signed.

Mississippi Tax Help Links