16026: MO - Kansas City Earnings Tax Form RD-109 (Drake18)

Resident individuals owe earnings tax on all salaries, wages, commissions, and other compensation for work done or services performed regardless of the location where the work is done or the services are performed. Nonresident individuals owe earnings tax on all salaries, wages, commissions, and other compensation for work done or services performed or rendered within the city.

Note: The KC 109 will not be generated in view when Kansas City withholdings are 1% of income, unless it is forced to print (from the KC 109 screen) or if the 109N screen has entries for a non-resident. 

Residents:

An entry of KC as the Resident City on federal screen 1 indicates that the taxpayer is a full-year resident of Kansas City and owes the earnings tax on all earnings.

The following amounts for a KC resident will carry to Form RD-109 Wage Earner Return Earnings Tax:

• All W-2 wages (regardless of city or state indicators), and
• Amounts from screen 99M where 1040 is selected in the For box.

Non-residents or Part-Year Residents:

The nonresident allocation must be entered directly on screen 109N. Screen 109N must have the indicator W2 screen sequence number to which this RD-109NR applies filled out to tie that screen with the applicable W2 screen. This will complete the employer contact information required for e-file. Complete any other fields, as needed. 

Local Tax Fully Withheld on W2 (special circumstance) 

A Kansas City return does not have to be filed when its withholdings sufficiently cover its income. Starting in May 2019, the KC 109, Wage Earner Return, will no longer generate automatically when:

• Kansas City withholdings are sufficient for the income, and
• the return would yield a $0 due on line 9.

The KC 109 will be generated if it is forced to print via the checkbox Force RD-109 to print on the 109 screen, or if the 109N screen has entries for a non-resident filer. 

Sufficient Withholding occurs during the following common scenarios:

• Kansas City withholding (W2 box 19) is 1% of Kansas City wages (W2 box 18).
• A Kansas City, MO residents’ W2 reports income to a state other than Kansas City, MO.
  • For instance, the following W2 is sourced completely to the state of Kansas, even though the taxpayer is a Kansas City, MO resident (indicated on federal screen 1):
  
  • As none of this income is taxed to Kansas City, MO (line 18), Kansas City tax, by default, is sufficiently withheld.

An apparent “sufficiently withheld” return may need to be manually reviewed and adjusted when a Kansas City non-resident works in Kansas City and another municipality. To do this, you must enter the following information on the 109N screen:

• W2 screen sequence number to which this RD-109NR applies - corresponds to the order in which the W2 appears in federal data entry 
• F Employer Section:
  • Email Address
  • Contact Person Name
  • Phone
• C Nonresidency Allocation:
  • 1 Total days worked everywhere (defaults to 260)
  • 2 Actual Days worked outside Kansas City, MO (defaults to 0)