North Carolina Releases Notice of Withholding Tax Changes

September 20, 2017 Paul Ogawa

The North Carolina Department of Revenue has released an information bulletin detailing important information about withholding tax as it relates to employers, pension payers, and other relevant parties. Of particular importance are changes relating to the filing of Form NC-3, the Annual Withholding Reconciliation form, and a change to the withholding rate for Tax Year 2019.

With regard to the filing of Form NC-3, the following are applicable moving forward.

  • The automatic waiver for the electronic submission filing requirement for NC-3s, W-2s, and 1099s has been extended to forms due to be filed on or before January 31, 2018. No action is required for this waiver to apply. Please note this DOES NOT alleviate businesses of their responsibility to file these forms in a timely manner.
  • The previous waiver for penalties tied to a timely filing of Form NC-3 has expired. A failure to timely file Form NC-3 due on or before January 31, 2018 will trigger the $50 penalty per form against the employer responsible, per Session Law 2015-259 (amended by G.S. 105-236(a)(10)c).

With regard to applicable changes to withholding for Tax Year 2019, the withholding tax rate will be 5.35%. Revised withholding tables for wages paid in 2019 will be made available in late 2018.

There were also adjustments made to the child tax credit, which can be viewed in the information bulletin itself.

About the Author

Paul Ogawa is a Junior Regulatory Counsel at Sovos Compliance. As part of the Regulatory Analysis team, his main areas of focus are state and federal tax withholding, the Affordable Care Act (ACA), and Canadian tax information reporting. Prior to Sovos, Paul worked as a litigation attorney in Boston area law firms, representing clients in insurance subrogation claims, family law matters, and employment disputes. Paul is a member of the Massachusetts Bar, earned his B.A. from Brandeis University and his J.D. from the Suffolk University Law School.

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