MO-NJD: Small Business Deduction for New Jobs Under Section 143.173, RSMo (Revision 2014-12)

Who files this form

Form MO-NJD is for eligible small businesses claiming the deduction for new jobs under Section 143.173, RSMo. It must be filed with Form MO-1040, MO-1120, or MO-1120S when claiming the deduction.

Check the tax-year coverage: The supplied form is marked Revised 12-2014. Its qualifications cover taxable years beginning on or after January 1, 2011, and ending on or before December 31, 2014. It does not establish eligibility for tax years 2024, 2025, or 2026.

To qualify under the printed rules, the business must:

• Have fewer than 50 full-time or part-time employees at all times during the tax year, counting employees of affiliated businesses.
• Be subject to income taxes imposed under Chapter 143, RSMo.
• Pay at least the county average wage, or the state average wage if the county average exceeds the state average.
• Include only new employees who have completed at least 52 consecutive weeks of employment and averaged at least 35 hours per week.

A qualifying employee must not have been employed in Missouri by the business or an affiliated business during the 12 months before the new job was created.

The form also allows qualifying pass-through entities to claim the deduction for tax years ending on or after August 28, 2012, subject to its other qualification rules. Each partner, member, or shareholder claiming a share must attach a completed Form MO-NJD to their income tax return.

What you'll need

Have the information requested on the form ready:

• Business name, address, business type, taxable-year beginning and ending dates, Missouri Tax I.D. number, federal employer I.D. number, and last four digits of the Social Security number, as requested.
• Your comparison date and the full-time employee counts for the deduction year and the previous year.
• Each eligible employee’s name, last four Social Security number digits, title or position code, county of work, annual county average wage, wages paid for 52 consecutive weeks, and deduction amount.
• The authorized owner’s or officer’s signature, printed name, title, and date.

Pass-through entities must also complete the Allocation Schedule with each partner’s, member’s, or shareholder’s name, last four Social Security number digits or complete FEIN, ownership share percentage, and allocated deduction amount. The entity must provide a copy of the form to each person claiming the deduction.

How to file

1. Choose one comparison date for the year. Enter the full-time employee counts for the deduction year and the immediately preceding year, then subtract line 3 from line 2.
2. Complete the employee table for the eligible employees reflected on line 4.
3. Enter the total deduction on the form and, as printed, on Form MO-1040, line 18B, or Form MO-1120, line 7.
4. Complete the Allocation Schedule if filing for a pass-through entity. Allocate the deduction in the same proportion as income is allocated for income tax purposes, rounding to whole numbers.
5. Have an authorized owner or officer sign and date the form.
6. Attach Schedule MO-NJD to Form MO-1040, MO-1120, or MO-1120S and mail it to the appropriate address.

The form lists these mailing addresses:

Personal Tax

Taxation Division

P.O. Box 385

Jefferson City, MO 65105-0385

Corporate Tax

Taxation Division

P.O. Box 3365

Jefferson City, MO 65105-3365

Each partner, member, or shareholder claiming the deduction must file their copy with their return.

Common mistakes

• Counting employees too soon: Employees must complete at least 52 weeks of full-time employment before being included in the deduction calculation.
• Choosing multiple comparison dates: The form allows only one comparison date per year.
• Using the wrong county: If an employee worked in more than one county, enter the county where they worked for most of their 52 weeks of employment.
• Covering only new employees’ insurance: To claim the $20,000 deduction, the business must pay at least 50 percent of health insurance premiums for all full-time employees, not just new employees.
• Leaving out extra pages: The form says to print additional pages if you hired more than ten new employees or have more than fifteen partners, members, or shareholders.
• Allocating a pass-through deduction incorrectly: Use the same proportions used to allocate income for income tax purposes, and round allocation amounts to whole numbers.

Questions people ask

How much is the deduction?

The form states $10,000 for each qualifying new job, or $20,000 for each qualifying new job if the business pays at least 50 percent of health insurance premiums for all full-time employees.

Do affiliated businesses count toward the employee limit?

Yes. Count employees of all affiliated businesses when determining whether the business has fewer than 50 employees. Businesses are affiliated if one controls or has the power to control the other, or a third party controls or has the power to control both.

Where can I find county average wages?

The form directs businesses to the Department of Economic Development’s county average wage information at https://meric.mo.gov/data/county-average-wages.

How does a pass-through entity choose its comparison dates?

The deduction-year comparison date can be any date within the tax year. The previous-year comparison date must be one year earlier.

Official sources

• https://dor.mo.gov/forms/MO-NJD.pdf