Mississippi uses source-based taxation for nonresidents and part-year residents. If you are filing a Mississippi Part-Year Resident or Nonresident return, report any income that is attributable to Mississippi sources or earned while you were a Mississippi resident. The following income types may need to be included on your Mississippi return.
W-2 Adjustments
If the amount reported in Box 1 (Federal Wages) of your Form W-2 differs from the amount reported in Box 16 (State Wages), enter the difference as instructed by the Mississippi return.
Rent Real Estate and Royalties
Income and losses from rental real estate, royalties, partnerships, S corporations, estates, and trusts reported on federal Schedule E should be reported on the applicable Mississippi schedules.
Interest Income
Enter any taxable interest received or credited during the tax year, including interest from notes, mortgages, bank deposits, and corporate bonds.
Do not include interest that is exempt from Mississippi tax, such as interest from obligations of:
- The United States Government
- The State of Mississippi
- Mississippi political subdivisions
Interest from obligations of other states, municipalities, political subdivisions, or foreign governments is generally taxable for Mississippi purposes.
Dividends
Report all dividends received during the tax year, including distributions of cash or property.
Alimony Received
Report the portion of alimony and separate maintenance payments that is taxable income for Mississippi purposes.
Business Income or Loss
If you owned or operated a business, enter your net business profit or loss attributable to Mississippi.
Capital Gain or Loss
If your federal return includes a capital gain or loss, enter the applicable amount here. Mississippi generally follows federal rules for calculating capital gains and losses and applies the same federal limitations. Unlike the federal system, Mississippi does not provide separate tax rates for capital gains. Capital gains are taxed at the same rate as other taxable income.
Total Pensions and Annuities
Under the Federal Internal Revenue Code (see Federal Form 5329), pensions and annuities that are taxable as early or excess distributions do not qualify for exemption from Mississippi income tax. This is reported here as taxable income. Separation pay is not retirement income and doesn’t qualify for exemption. Also taxable for Mississippi purposes are deferred compensation plan distributions received prior to attainment of retirement age and/or service requirements. Don’t report Social Security benefits, annuity benefits received under the federal Railroad Retirement Act, or retirement income from federal, state, and private retirement systems as they are exempt from tax.
Farm Income or Loss
Enter net farm income/loss here.
Unemployment Compensation
Enter the amount of unemployment compensation from Form(s) 1099-G received in the tax year that is taxable as Mississippi income.
Other Gains/(Loss) from Form 4797 attributable to Mississippi
Enter the portion of gains or losses from the sale or exchange of business property that is taxable in Mississippi. Form 4797 reports transactions such as sales of real estate used in a trade or business, depreciable property, involuntary conversions, and depreciation recapture. For Mississippi purposes, only gains or losses from property located in Mississippi are included. Nonresidents report Mississippi-sourced property only, while part-year residents include transactions during their Mississippi residency or involving Mississippi property.
Non-qualified distribution from a Catastrophe Savings Account
Mississippi Catastrophe Savings Accounts are designed to help taxpayers save for hurricane, flood, and other disaster-related expenses.
Enter only amounts withdrawn for purposes not permitted by law. Do not report qualified withdrawals, such as amounts used for property repairs, insurance deductibles, or other eligible disaster-related expenses.
First-time Home Buyer Unqualified Expenses
Enter any withdrawal from a Mississippi First-Time Home Buyer Savings Account that does not meet the requirements for a qualified distribution.
Other Income/(Loss), from Federal Form 1040 Line 8, attributable to Mississippi
Enter the amount from Form 80-108, Part V, Line 10 (Schedule N).
Schedule N is used to report other income and loss items that are attributable to Mississippi.
Refer to the Mississippi Instructions for additional guidance.