After the 2013 Tax Simplification and Reduction Act, North Carolina state income tax rate is now 4.75%. The tax is imposed on taxable income, which is the sum of all sources of income less qualifying deductions and exemptions. Itemized deductions include mortgage interest, property taxes, and charitable contributions. The standard deduction is $10,750 for single filers and $21,500 for married filers. Military retirement pay is also eligible for a deduction.
North Carolina is a moderately tax-friendly state for retirees, with low property and sales taxes. However, Social Security benefits are taxable, and other forms of retirement income are taxed at the same rate as regular income.
How to File North Carolina State Income Tax?
In order to file a North Carolina state income tax return, you will need to have all of your records in order. This includes employers’ wage and tax statements (Form W-2), retirement distribution statements (Form 1099-R) from pension payers, and interest and dividend statements. If you file your return before you receive all of these documents, you may need to amend your return.
How to Pay North Carolina State Income Tax?
To pay North Carolina State Income Tax, visit the North Carolina Department of Revenue website and select ‘Pay Taxes Online’. Select the ‘Bank Draft’ or ‘Credit/Debit Card’ payment option and complete the information on the screen. Please note that credit/debit card payments will be charged a fee. Then, click ‘Submit’. You can also make payments for tax returns, extensions or estimates by mail. Complete voucher Form D-400V and write a check or money order payable to the NC Department of Revenue. Include the voucher’s tax year, daytime phone number, and SSN.
Individuals can request an installment payment plan through the Department of Revenue website. The process is relatively easy, and there are no minimum or maximum debt thresholds. However, certain criteria must be met to qualify for a tax payment plan.
North Carolina State Income Tax Due Dates
North Carolina state income tax forms and payment due dates are subject to change. For the most current information, contact your local office or the NC Department of Revenue. The state’s new budget includes several significant changes, including phasing out the corporate income tax and lowering individual rates. Taxpayers must pay attention to these changes and keep up with the latest developments.
If you are a resident of North Carolina, you should file your income tax return by April 16th. If you are unable to meet this deadline, you can apply for an extension using Form D-400.
If a return or payment is filed late, the NCDOR will impose a penalty of 2% per month (up to a maximum of 12 months) on any unpaid balance. Interest will be calculated beginning on January 6th of the year following the delinquent date of the return or payment.
Individuals and families can reduce their NC tax liability by claiming a personal exemption. However, this is not an automatic deduction and requires an affirmative election.