Locum Tenens Taxes in Missouri

A nonresident who is required to file a federal return must file a Missouri return if Missouri-source income is $600 or more. Every paid locum assignment clears that bar. You file Form MO-1040 and attach Form MO-NRI, which calculates your Missouri income percentage and prorates the tax so you pay Missouri only on the Missouri share of your income.

Missouri sources compensation for personal services to where the work is physically performed, the same principle as most states. Days worked at a Missouri facility generate Missouri-source income whether you are paid on a 1099 directly, through an agency, or through your own S-corp. Where the paying agency is headquartered is irrelevant.

Kansas City and St. Louis each impose a 1% earnings tax. It applies to city residents on all earnings and to nonresidents on earnings from work performed within city limits. Critically for locums, it reaches self-employment income, not just W-2 wages. A 1099 physician covering shifts at a hospital inside Kansas City, Missouri or the City of St. Louis owes 1% on the net profit attributable to that work.

The mechanics run outside the state return entirely. Self-employed taxpayers file a city profits return: Form RD-108 for Kansas City, Form E-234 for St. Louis (a self-employed individual selects Type E-2). W-2 locums usually have the 1% withheld by the employer and may not need to do anything further; 1099 locums have nothing withheld and must file and pay directly.

Missouri has no reciprocal agreements with any state. That matters most in its two border metros. Kansas City sits astride the Kansas-Missouri line, and the St. Louis metro spills into Illinois. A physician living on one side and working on the other files nonresident where they work, resident where they live, and reconciles with a credit.

For 1099 locums the pattern is: pay Missouri (and any city earnings tax) on the Missouri-source income first, then claim a credit on the home-state return for the Missouri state tax, generally limited to the home state's own tax on that income. The same applies in reverse for Missouri residents working Kansas or Illinois assignments. The city earnings tax rides on top and follows its own credit rules, as covered above.

W-2 locum agencies generally withhold Missouri income tax on wages for work performed in Missouri, and employers located in Kansas City and St. Louis typically withhold the 1% city earnings tax as well. 1099 contractors get no withholding at any level: not state, not city. The full liability accrues silently until filing.

Missouri expects quarterly estimated payments via Form MO-1040ES (or online) when you anticipate owing beyond a small threshold with no withholding. If you are working inside Kansas City or St. Louis limits, budget the additional 1% alongside your state estimates so the city return does not arrive as a surprise in April. A practical rule for a Missouri-heavy year: set aside roughly 5-6% of Missouri-source net income for the state and city layers combined, then let your preparer true it up.

Missouri does not impose a California-style minimum franchise tax on S-corps, so the standard self-employment tax math behind a locum S-corp survives Missouri assignments without a separate entity-level erosion. The entity files in Missouri if it does business there, and the owner still picks up the Missouri-source income on the personal nonresident return.

Missouri also offers an elective pass-through entity tax under its SALT Parity Act (filed on Form MO-PTE). An electing S-corp or partnership pays Missouri tax at the entity level at the top individual rate, and owners claim a credit, restoring a federal deduction for that state tax and working around the federal SALT cap. Whether it pays off depends on your federal itemizing situation and how much of your income is Missouri-source; model it before electing.

One caution: the Kansas City and St. Louis earnings taxes reach business profits earned inside those cities regardless of entity form. Running your locum income through an S-corp does not remove the 1% on work physically performed in-city.

Illustrative example, not a specific client outcome. Consider a 1099 hospitalist who lives in Illinois and earns $300,000 of net 1099 income for the year. He works 40% of his days ($120,000 of income) at a hospital inside St. Louis city limits and the rest at Illinois facilities near home.