Non-Resident Tax Credit
The Tax Offset Credit is a procedure used to give dollar for dollar credit to non-resident students who pay Missouri state income tax. The Credit is used to offset the non-resident tuition fee charged to the student account.
The student must be a non-resident of the state of Missouri and must pay Missouri state income tax. If the student is a dependent on another person's tax return, that person must live outside the state of Missouri and must pay Missouri state income tax.
- A copy of the student's Missouri State Income Tax Return (MO-1040 or MO-1040A), including the Non-resident Income Schedule (NRI).
- If the student is claimed as a dependent on another person's tax return, a copy of page 1 of that person's Federal 1040 or 1040A form showing the student as a dependent, is required in addition to that person's Missouri State Income Tax Return (MO-1040 or MO-1040A) and Non-resident Income Schedule (NRI).
- All W2's, 1099's, or Schedules that show sources of Missouri income for the same year as the tax return.
- Please submit copies of the above documentation. This information will not be returned. It is the student's responsibility to obtain copies of the appropriate documentation.
The student must re-apply for the Non-Resident Tax Offset Credit each year. Taxes from the previous tax year are used to calculate the tax offset for the current academic year. For example; 2005 tax information would be used for Fall Semester 2006 and Spring Semester 2007. Tax credit not used during the academic year cannot be carried forward to the next academic year.
How it affects your account:
- The first step is to determine the amount of Missouri state income tax that was due. This is the amount found on the Missouri state income tax form listed as "total tax". (Line 11 on 2005 Form MO-1040A or Line 30 on 2005 Form MO-1040).
- The second step is to determine the amount of non-resident fees charged to the student. If the student is receiving a Non-Resident Scholarship, the amount of the scholarship is subtracted from the non-resident fees charged to the student prior to the application of the Non-Resident Tax Credit.
- The Cashier's office then applies the necessary tax offset credit.
Example 1: A student has $500 in non-resident fees for Fall 2006 and $1,500 was paid in Missouri state taxes for tax year 2005. We would then apply $500 to offset the Fall 2006 non-resident charges and $1,000 would be available for Spring 2007. If the student had only $600 in non-resident fees for Spring 2007, we would apply the tax credit of $600.00 and the remaining $400 would be unavailable for further use since Spring is the last semester of the academic year. (See "How Often Should Documentation Be Submitted" listed above.)
Example 2: A student has $2,000 in non-resident fees for Fall 2006 and receives a $1,500 National Access scholarship, which results in the student owing $500 in non-resident fees. If $300 was paid in Missouri state taxes for tax year 2005, the student would then only owe $200 in non-resident fees. There would be no credit left to be applied to Spring 2007.
What if classes are dropped or non-resident fees are otherwise reduced? The tax-offset credit can only be used to reduce the non-resident tuition fees. If the non-resident tuition fees are reduced, the amount of the tax-offset credit will also be reduced if the offset credit is more than the actual non-resident tuition fees charged.
To find out more information about the Non-Resident Tax Credit, please contact the Cashier's Office at 573-341-4195.