TAXES 17-09, North Carolina State Income Tax Withholding | National Finance Center

TAXES 17-09, North Carolina State Income Tax Withholding

Published: March 13, 2017
Effective: Pay Period 06, 2017

Summary

The income tax withholdings for the State of North Carolina will change as follows:

No action on the part of the employee or the personnel office is necessary.

Tax Formula

State Abbreviation:

NC

State Tax Withholding State Code:

37

Acceptable Exemption Form:

NC-4

Basis for Withholding:

State Exemptions

Acceptable Exemption Data:

S/M/H, Number of Allowances

TSP Deferred:

Yes

Special Coding:

None

Additional Information:

North Carolina has implemented a new withholding exemption claim form. The State of North Carolina has indicated that all employees must file a new Form NC-4 EZ or NC-4 for tax year 2017.

Withholding Formula (Effective Pay Period 06, 2017)

  1. Subtract the nontaxable biweekly Thrift Savings Plan contribution from the gross biweekly wages.
  2. Subtract the nontaxable biweekly Federal Health Benefits Plan payment(s) (includes dental and vision insurance program and Flexible Spending Account - health care and dependent care deductions) from the amount computed in step 1.
  3. Add the taxable biweekly fringe benefits (i.e., taxable life insurance) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
  4. Multiply the adjusted gross biweekly wages by 26 to obtain the gross annual wages.
  5. Determine the standard deduction allowance by applying the following guideline and subtract this amount from the annual wages:

    If the Employee Is:

    The Standard Deduction Is:

    Nonresident Alien, Regardless of Marital Status

    $0

    Single

    $8,750

    Married or Qualifying Widow(er)

    $8,750

    Head of Household

    $14,000

  6. Determine the exemption allowance by subtracting the amount from the gross annual wages to compute the taxable income:

    Exemption Allowance = $2,500

  7. Multiply the annualized taxable wages calculated in step 6 by 5.599 percent to determine the annual tax amount.
  8. Divide the annual North Carolina tax withholding calculated in step 7 by 26 and round to the nearest dollar to obtain the biweekly North Carolina tax withholding.
  9. If the employee is a nonresident alien (NRA), and is claiming additional withholding, subtract the applicable amount shown in the table below from the additional withholding (but not less than zero).

    Pay Frequency

    Additional Withholding

    Weekly

    $9

    Biweekly

    $19

    Semimonthly

    $20

    Monthly

    $41

    Any other pay frequency

    $489.91 / # of annual pay periods, rounded up to the next whole dollar

  10. Add the additional amount (reduced by NRA additional amount from previous step) or percentage elected by the employee to the pay period tax calculated in the above step and round to the nearest dollar to determine the amount of tax to be withheld for this pay period.

Resources

To view the updated tax formula, go to the HR and Payroll Clients page from the MyNFC drop-down menu on the National Finance Center (NFC) homepage. Select the Publications tab in the center ribbon. Select U.S. Income Tax Formulas from the Publication menu to launch the tax map. Select the desired State from the map provided for the formula.

Inquiries

For questions about NFC processing, authorized Servicing Personnel Office representatives should contact the NFC Contact Center at 1-855-NFC-4GOV (1-855-632-4468) or via the Internet using the Requester Console.