This tax season, many Missourians may find that they are paying more, or getting less returned to them due to an error from the Missouri Department of Revenue that could have lasted 15 years.
As a result of a “Tax Cuts and Jobs Act” from the 2017 federal tax reforms, standard deductions were raised for married couples to $24,000 and for singles to $12,000. It also repealed personal exemptions, which allowed $4,050 exempted per taxpayer, spouse, and dependent.
Many Missourians didn’t adjust their W-4 for the new changes and were withholding more than what they were supposed to.
H&R Block Tax Specialist Jennifer Arnett explains that it was a fix to the system that finally revealed the error the Department of Revenue.
“There was a glitch in the e-filing system that was giving an additional credit to people, causing them to get a little less, or possibly more of a refund,” she said. “Having fixed the federal system, it trickled down to state, and fixed that glitch. Now more people are owing, is what I understand what happened.”
According to State Rep. Chris Dinkins, R-Annapolis, it “could result in thousands of Missourians receiving a smaller than expected tax refund, or even owing a small amount in taxes to the state.” She referred to this as an “April surprise.”
“For most clients, it’s been a negligible amount, so there hasn’t been a whole big uproar about it,” Arnett said.
“Later in the season, it may affect more people, because those clients typically have less withheld, so they don’t have big refund that will make up the difference,” she said.
Though it’s difficult to predict how much it will affect people, State Rep. Mike Henderson, R-Bonne Terre, said that to many it won’t be negligible.
“People who were expected to get $100 from their income tax may get nothing. People who were expected to maybe get $50 back, may pay $50. It’s all depending on the amount of money you get, of course.
“I have to answer to my constituents who are going to be angry, and I don’t blame them. I’m going to be angry when I fill out my taxes, too. I don’t think they should all have to go through that.”
According to Henderson, the Department of Revenue, after being rebuked by the House Budget Committee at a hearing, will take steps to prevent it from happening again.
“From my understanding, they are getting ahold of all employers and making sure they get it corrected immediately,” Henderson said. “They will be held accountable.” asserted.
This isn’t just a problem for the Missouri citizens, but has left a tax hole in the state. “It’s huge in the Department of Revenue,” Henderson asserts. “We’re looking at our revenue, and thinking ‘boy, it’s not coming in as much.’”
According to Dinkins, it has created a more than $500 million budget hole.
“There’s no defending it,” Henderson asserted. “It’s a mistake [the DOR] made, and they need to own it. The only thing we can do now is make sure it doesn’t happen again.”
Matthew Morey is a reporter for the Daily Journal. He can be reached at 573-518-3617, or at email@example.com.