American Payroll Association (APA) Basic Guide to Payroll, 2013 Edition
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North Carolina has issued new withholding tables for wages paid on and after January 1, 2014. The tables were revised to reflect recently approved tax legislation (see Payroll Management Guide Report Letter 2314, July 30, 2013). All of the tables will be reproduced in the Payroll Guide at ¶7588 and ¶7589.
The supplemental wage rate will be 5.8%.
Under the new legislation, taxpayers may no longer claim a personal exemption for themselves, their spouse, children, or any other qualifying dependents. Many deductions and tax credits that impact North Carolina withholding tax are no longer available for tax years beginning on or after January 1, 2014. As a result, every employer must have all employees provide a new Employee’s Withholding Allowance Certificate, either Form NC-4 EZ or Form NC-4. The new form must be completed by the employee and provided to the employer so the correct amount of State income tax is withheld for any payment periods beginning on or after January 1, 2014.
Form NC-4 EZ
The state anticipates that the new, simpler form will likely suffice for most employees. Employees should use this form if they plan to claim the N.C. standard deduction and plan to claim no tax credits or only the credit for children, if they qualify to claim exempt status, or if they prefer not completing the extended Form NC-4. Employees should understand Form NC-4 EZ can still be used even if they plan to itemize deductions for their tax filing.
All recipients of pension or annuity payments must complete and provide to their payer a new Form NC-4P, Withholding Certificate for Pension or Annuity Payments, in order to withhold the correct amount of State income tax for any pension payment periods beginning on or after January 1, 2014. If an employee fails to provide the employer with the applicable updated form(s), the employer is required to withhold North Carolina tax based on the following status: (1) Employees failing to file Form NC-4 EZ or Form NC-4: “Single” with no allowances; (2) Pension Recipients failing to file Form NC-4P: “Married” with three allowances. Employers who require additional assistance can call the Department of Revenue at 1-877-252-4487, which will be available through February 28, 2014. (2014 Income Tax Withholding Tables and Instructions for Employers, NC-30, Rev. 11-13 `http://www.dor.state.nc.us/downloads/wh_forms.html#nc30.)
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