North Carolina Updates Publication NC-30, 2019 Income Tax Withholding Tables and Instructions for Employers

November 30, 2018 Tom Hospod

The North Carolina Department of Revenue has published its annual revision of Publication NC-30, 2019 Income Tax Withholding Tables and Instructions for Employers.

 There are several changes of which filers and taxpayers should take note:

  •  The individual tax rate has been decreased to 5.25%
  • The definition of “wages” has changed, effective June 12, 2018, to align with the definition of “wages” under IRC Section 3401
  • New requirements relating to filing corrections/amendments
    • When a taxpayer voluntarily files an amended federal return with the Internal Revenue Service that contains adjustments that increase the amount of the taxpayer’s North Carolina tax liability, the taxpayer must file a State amended return with the Department within six months of filing the federal amended return
    • If the amended return decreases the amount of North Carolina withholding, taxpayer may (but is not required to) file the return with the state. If seeking a refund, taxpayer must file amended return within the statute of limitations.
    • Applies to filings on or after June 12, 2018
  • If an employer stops paying wages during the taxable year, must file Form NC-3, Annual Withholding Reconciliation, within 30 days of the last payment of remuneration (effective June 18, 2018)
  • Penalty changes
    • Failure to file informational returns by the due date: $50 per return up to $1,000
    • Failure to file informational returns in the correct format prescribed by NCDOR: $200
    • Applicable to Forms NC-3 filed on or after June 18, 2018
    • Taxpayers may file Form NC-5501 to request a penalty waiver

Payment settlement entities (Form 1099-K payors) will now be subject to information return penalties described above, effective June 18, 2018

About the Author

Tom Hospod

Tom Hospod is a member of the Tax Research Team for the Direct Tax division at Sovos Compliance, where his main areas of focus are Tax Withholding and Automatic Exchange of Information (AEOI). Prior to Sovos, Tom worked as a legislative aide in the Massachusetts House of Representatives. He also has experience in securities law—focusing on broker-dealer disputes and representing clients in FINRA arbitration. Tom is a member of the Massachusetts Bar, earned his B.A. from Boston College and his J.D. from the University of Miami.

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