ST. LOUIS — Thousands of people may soon be able to get refunds after the city of St. Louis recently settled a lawsuit over income taxes.
Residents who live in the city of St. Louis pay a 1% income tax. People who live outside the city but whose employers are based in St. Louis also pay this tax.
With 6 remote workers Attorneys Mark Milton and Bevis Schockfiled suit alleging that he was taxed while working remotely outside the city during the pandemic.
After three years of fighting and a settlement, the refund process will begin on July 1st.
Revenue Collector Gregory F.X. Daly said the city has set aside $26 million for the refund.
Daly released the following statement about the settlement on June 14:
“My office chose to fight this lawsuit alongside the City because we believed our actions were consistent with the provisions of the statute and were the right thing to do on behalf of the citizens of the City of St. Louis,” said Revenue Collector Gregory FX Daly. “The Court upheld the Collector’s and the City’s position for the most part, but found that remote work for non-City residents is not subject to income or payroll taxes under the way the City and Collector interpreted the statute.”
“We respect the court’s decision and have put in place a simplified process that complies with the court’s order. Our goal is to provide a transparent and easy-to-understand process for people filing their first claims for remote work in 2020, 2021 and 2022,” Daly explained.
If this is the case, there are a few things you need to know.
- Form E-1R for each tax year. The form is available from the IRS. Visit the website
- You will also need to submit a W-2 form each year.
- Applicants must indicate the number of days they will work remotely.
- Days worked outside the city must be verified by the employer.
Milton said having documentation showing which days will be worked remotely makes handovers easier.
He added: “Some people even have records of key fobs to see how many times you’ve been through the door.”
Milton believes 100,000 people could be affected, adding that people can still apply even if they’ve only worked remotely for a day.
Daly said in a news release that to date, about 2,100 taxpayers have challenged their remote income for 2020 through 2022. Those challenges have been granted and taxpayers do not need to refile.
“It’s not automatic. It’s up to you as a taxpayer to do it yourself or hire a tax professional,” Milton added. “These are tough times, so you need to be proactive. Don’t wait. You need a few days to look for your W-2 and give your employer enough time.”
Once refund requests have been reviewed and calculated, refunds will be processed in the order they are received.
Payment is expected to be completed by the end of 2024.
- For the 2020, 2021 and 2022 tax years, claims must be submitted by September 30, 2024.
- The deadline for 2023 is April 15, 2025.
