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