Missouri and Kansas share a roughly 250-mile-long border -- and that border cuts through the middle of the Kansas City metropolitan area, home to more than 2 million people. As a result, it's common for Missouri residents to work in Kansas. If you do, you must file income tax returns in both states. The good news is that Missouri will give you a credit for taxes you pay to Kansas.
How It Works
If you're a Missouri resident working in Kansas, your employer there will withhold Kansas income taxes from your pay the same way it would if you were a Kansas resident. Come tax time, you'll first fill out your federal return. Then you'll fill out a Kansas return as a nonresident and compute how much you owe in Kansas taxes. Finally, you'll fill out a Missouri return and compute how much you owe there.
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Kansas' individual income tax return is Form K-40, which has a required supplemental form, Kansas Schedule S. You file the same forms regardless of whether you are a resident or a nonresident. Under "Residency Status" on the K-40, check the box for nonresident. Form K-40 starts by asking you for your federal adjusted gross income, which you computed on your federal return. Part A of Schedule S then has you make some adjustments to that figure to arrive at your Kansas taxable income, from which you determine your Kansas tax liability. Finally, you use Part B of Schedule S to figure out what percentage of your income came from Kansas sources -- as opposed to Missouri or some other state. You pay your Kansas income tax based on that percentage. If all your income comes from Kansas, the percentage will be 100 percent.
Missouri's individual income tax return is Form MO-1040. This form, too, starts by asking you for your federal adjusted gross income, then makes tweaks to that figure based on differences between the state and federal tax systems. Missouri taxes you based on all your income -- regardless of whether it came from Kansas, Missouri or somewhere else. However, once you have computed your Missouri tax, you then take a credit for what you paid to Kansas. Use Form MO-CR to figure the credit. If your Kansas tax exceeds your Missouri liability, then you owe Missouri nothing.
Kansas requires you to attach a copy of your Missouri return to Schedule S. Missouri requires you to attach a copy of your Kansas return to Form MO-CR. Both Kansas and Missouri income taxes are due the same day as federal taxes: April 15, or the following Monday if April 15 falls on a weekend.