The NC-4 form is the Employee’s Withholding Allowance Certificate used in North Carolina to determine the correct amount of state income tax to be withheld from an employee's paycheck. By completing this form, employees can specify their withholding allowances, which directly impacts their take-home pay. It is essential to fill out the NC-4 accurately to ensure compliance with tax regulations and avoid potential penalties.
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The NC-4 form is an essential document for employees in North Carolina, designed to ensure that state income tax is withheld accurately from their paychecks. This form allows employees to declare their withholding allowances, which can significantly impact the amount of tax deducted from their earnings. By completing the NC-4, employees provide their employers with the necessary information to determine the correct withholding amount based on their personal financial situation. If an employee does not submit this form, the employer must withhold taxes as if the employee is single with zero allowances, potentially resulting in higher tax deductions than necessary. The NC-4 also includes options for specific situations, such as the NC-4 EZ for those claiming the standard deduction or the NC-4 NRA for nonresident aliens. Completing the NC-4 involves a worksheet that helps individuals assess their eligibility for various allowances, including those related to child deductions and itemized deductions. It’s crucial to review and update the form whenever there are changes in employment or personal circumstances, ensuring that tax withholdings remain accurate throughout the year.
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11-19
NC-4
Employee’s Withholding Allowance Certificate
PURPOSE - Complete Form NC-4 so that your employer can withhold the correct amount of State income tax from your pay. If you do not provide an NC-4 to your employer, your employer is required to withhold based on the filing status, “Single” with zero allowances.
FORM NC-4 EZ - You may use Form NC4-EZ if you plan to claim either the N.C. Standard Deduction or the N.C. Child Deduction Amount (but no other N.C. deductions), and you do not plan to claim any N.C. tax credits.
FORM NC-4 NRA - If you are a nonresident alien you must use Form NC-4 NRA. In general, a nonresident alien is an alien (not a U.S. citizen) who has not passed the green card test or the substantial presence test. (See Publication 519, U.S. Tax Guide for Aliens, for more information on the green card test and the substantial presence test.)
FORM NC-4 BASIC INSTRUCTIONS - Complete the NC-4 Allowance Worksheet. The worksheet will help you determine your withholding allowances based on federal and State adjustments to gross income
including the N.C. Child Deduction Amount, N.C. itemized deductions, and N.C. tax credits. However, you may claim fewer allowances than
you are entitled to if you wish to increase the tax withheld during the tax year. If your withholding allowances decrease, you must file a new NC-4 with your employer within 10 days after the change occurs. Exception:
When an individual ceases to be “Head of Household” after maintaining the household for the major portion of the year, a new NC-4 is not required until the next year.
TWO OR MORE JOBS - If you have more than one job, determine the total number of allowances you are entitled to claim on all jobs using one Form
NC-4 Allowance Worksheet. Your withholding will usually be most accurate when all allowances are claimed on the NC-4 filed for the higher paying job and zero allowances are claimed for the other. You should also refer to the
“Multiple Jobs Table” to determine the additional amount to be withheld on Line 2 of Form NC-4 (See page 4).
NONWAGE INCOME - If you have a large amount of nonwage income, such as interest or dividends, you should consider making estimated tax
payments using Form NC-40 to avoid underpayment of estimated tax interest. Form NC-40 is available on the Department’s website at www.
ncdor.gov.
HEAD OF HOUSEHOLD - Generally you may claim “Head of Household” filing status on your tax return only if you are unmarried and pay more than 50% of the costs of keeping up a home for yourself and your dependent(s)
or other qualifying individuals.
SURVIVING SPOUSE - You may claim “Surviving Spouse” filing status only if your spouse died in either of the two preceding tax years and you meet the following requirements:
1.Your home is maintained as the main household of a child or stepchild for whom you can claim a federal exemption; and
2.You were entitled to file a joint return with your spouse in the year of your spouse’s death.
MARRIED TAXPAYERS - For married taxpayers, both spouses must agree as to whether they will complete the NC-4 Allowance Worksheet based on
the filing status, “Married Filing Jointly” or “Married Filing Separately.”
•Married taxpayers who complete the worksheet based on the filing status, “Married Filing Jointly” should consider the sum of both spouses’ income, federal and State adjustments to income, and State tax credits to determine the number of allowances.
•Married taxpayers who complete the worksheet based on the filing status, “Married Filing Separately” should consider only his or her portion of income, federal and State adjustments to income, and State tax credits to determine the number of allowances.
All NC-4 forms are subject to review by the North Carolina Department of Revenue. Your employer may be required to send this form to the North Carolina Department of Revenue.
CAUTION: If you furnish an employer with an Employee’s Withholding Allowance Certificate that contains information which has no reasonable basis and results in a lesser amount of tax being withheld than would have been withheld had you furnished reasonable information, you are subject to a penalty of 50% of the amount not properly withheld.
Cut here and give this certificate to your employer. Keep the top portion for your records.
WebEmployee’s Withholding Allowance Certificate
10-17
1.Total number of allowances you are claiming
(Enter zero (0), or the number of allowances from Page 2, Line 17 of the NC-4 Allowance Worksheet)
2. Additional amount, if any, withheld from each pay period (Enter whole dollars)
,.00
Social Security Number
Filing Status
Single or Married Filing Separately
Head of Household
Married Filing Jointly or Surviving Spouse
First Name (USE CAPITAL LETTERS FOR YOUR NAME AND ADDRESS)
M.I.
Last Name
Address
County (Enter first five letters)
City
State
Zip Code (5 Digit)
Country (If not U.S.)
Employee’s Signature
Date
I certify, under penalties provided by law, that I am entitled to the number of withholding allowances claimed on Line 1 above.
NC-4 Allowance Worksheet
PART I
Answer all of the following questions for your filing status.
Single -
1.
Will your N.C. itemized deductions from Page 3, Schedule 1 exceed $13,249?
Yes
o
No
2.
Will your N.C. Child Deduction Amount from Page 3, Schedule 2 exceed $2,499?
3.
Will you have federal adjustments or State deductions from income?
4.
Will you be able to claim any N.C. tax credits or tax credit carryovers?
If you answered “No” to all of the above, STOP HERE and enter ZERO (0) as total allowances on Form NC-4, Line 1.
If you answered “Yes” to any of the above, you may choose to go to Page 2, Part II to determine if you qualify for
additional allowances. Otherwise, enter ZERO (0) on Form NC-4, Line 1.
Married Filing Jointly -
Will your N.C. itemized deductions from Page 3, Schedule 1 exceed $23,999?
5.
Will your spouse receive combined wages and taxable retirement benefits of
less than $8,250 or only retirement benefits not subject to N.C. income tax?
Married Filing Separately -
Will your portion of N.C. itemized deductions from Page 3, Schedule 1 exceed $13,249?
Head of Household-
Will your N.C. itemized deductions from Page 3, Schedule 1 exceed $18,624?
Page 1
Surviving Spouse -
Will your N.C. itemized deductions from Page 3, Schedule 1 exceed 23,999?
If you answered “No” to all of the above, STOP HERE and enter FOUR (4) as total allowances on Form NC-4, Line 1.
If you answered “Yes” to any of the above, you may choose to go to Part II to determine if you qualify for additional
allowances. Otherwise, enter FOUR (4) on Form NC-4, Line 1.
NC-4 Part II
Enter your total estimated N.C. itemized deductions from Page 3, Schedule 1
.....................................................
_______________________$
.
Enter the applicable
{
$10,750 if Single
N.C. standard deduction
$21,500 if Married Filing Jointly or Surviving Spouse
based on your filing status.
$10,750 if Married Filing Separately
$16,125 if Head of Household
Subtract Line 2 from Line 1. If Line 1 is less than Line 2, enter ZERO (0)
Enter an estimate of your total N.C. Child Deduction Amount from Page 3, Schedule 2
Enter an estimate of your total federal adjustments to income and State deductions from
federal adjusted gross income
................................................................................................................................
6.
Add Lines 3, 4, and 5
7.
Enter an estimate of your nonwage income (such as dividends or interest)
$_____________________
8.Enter an estimate of your State additions to federal adjusted gross
income
8.
$
9.
Add Lines 7 and 8
10.
Subtract Line 9 from Line 6 (Do not enter less than zero)
11.
Divide the amount on Line 10 by $2,500 . Round down to whole number
_______________________
Ex. $3,900 ÷ $2,500 = 1.56 rounds down to 1
12.
Enter the amount of your estimated N.C. tax credits
13.
Divide the amount on Line 12 by $134. Round down to whole number
Ex. $200 ÷ $134 = 1.49 rounds down to 1
14. If filing as Single, Head of Household, or Married Filing Separately, enter zero (0) on this line. If filing as Surviving Spouse, enter 4.
If filing as Married Filing Jointly, enter the appropriate number from either (a), (b), (c), (d), or (e) below.
(a)Your spouse expects to have combined wages and taxable retirement benefits of $0 for N.C. purposes, enter 4. (Taxable retirement benefits do not include: Bailey, Social Security, and Railroad retirement)
(b)Your spouse expects to have combined wages and taxable retirement benefits of more than $0 but less than or equal to $3,250, enter 3.
(c)Your spouse expects to have combined wages and taxable retirement benefits of more than $3,250 but less than or equal to $5,750, enter 2.
(d)Your spouse expects to have combined wages and taxable retirement benefits of more than $5,750 but less than or equal to $8,250, enter 1.
(e)Your spouse expects to have combined wages and taxable retirement benefits of more than
$8,250, enter 0
14.
15. Add Lines 11, 13, and 14, and enter the total here
15.
16. If you completed this worksheet on the basis of Married Filing Jointly, the total number of allowances determined
on Line 15 may be split between you and your spouse, however, you choose. Enter the number of allowances
from Line 15 that your spouse plans to claim
16.
17. Subtract Line 16 from Line 15 and enter the total number of allowances here and on Line 1 of your
Form NC-4, Employee’s Withholding Allowance Certificate
17.
Page
2
NC-4 Allowance Worksheet Schedules
Important: If you cannot reasonably estimate the amount to enter in the schedules below, you should enter ZERO (0) on Line 1, NC-4.
Schedule 1
Estimated N.C. Itemized Deductions
Qualifying mortgage interest
Real estate property taxes
Total qualifying mortgage interest and real estate property taxes*
Charitable Contributions (Same as allowed for federal purposes)
Medical and Dental Expenses (Same as allowed for federal purposes)
Total estimated N.C. itemized deductions. Enter on Page 2, Part II, Line 1
*The sum of your qualified mortgage interest and real estate property taxes may not exceed $20,000. For married taxpayers, the $20,000 limitation applies to the combined total of qualified mortgage interest and real estate property
taxes claimed by both spouses, rather than to each spouse separately.
Schedule 2
Estimated N.C. Child Deduction Amount
A taxpayer who is allowed a federal child tax credit under section 24 of the Internal Revenue Code is allowed a deduction for each dependent child unless adjusted gross income exceeds the threshold amount shown below.
The N.C. Child Deduction Amount can be claimed only for a child who is under 17 years of age on the last day of the year.
Deduction
No. of
Amount per
Estimated
Adjusted Gross Income
Children
Qualifying Child
Single
Up to
20,000
Over
30,000
40,000
50,000
60,000
MFJ or SS
80,000
100,000
120,000
HOH
45,000
75,000
90,000
MFS
_____________
2,500
______________
2,000
1,500
1,000
500
-
Page 3
Multiple Jobs Table
Find the amount of your estimated annual wages from your lowest paying job(s) in the left hand column. Follow across to find the amount of additional tax to be withheld for each pay period. Enter the additional amount to be withheld on Line 2 of your Form NC-4.
Additional Withholding for Single, Married, or Surviving Spouse with Multiple Jobs
Estimated Annual Wages
Payroll Period
At Least
But Less Than
Monthly
Semimonthly
Biweekly
Weekly
0
1000
1
2000
7
3
3000
11
6
5
4000
16
8
4
5000
20
10
9
6000
25
12
7000
29
14
13
8000
33
17
15
9000
38
19
10000
42
21
10750
46
23
Unlimited
48
24
22
Additional Withholding for Head of Household Filers with Multiple Jobs
11000
47
12000
51
26
13000
56
28
14000
60
30
15000
65
32
16000
69
35
71
36
Page 4
Completing the NC-4 form is essential for ensuring accurate state income tax withholding from your paycheck. This process requires careful attention to detail to avoid potential penalties for incorrect information. Below are the steps to fill out the NC-4 form properly.
What is the purpose of the NC-4 form?
The NC-4 form is used by employees in North Carolina to inform their employers about the number of allowances they wish to claim for state income tax withholding. By providing this information, employees can ensure that the correct amount of state income tax is withheld from their paychecks. If an employee does not submit this form, the employer is required to withhold taxes as if the employee is single with zero allowances.
Who should use Form NC-4 EZ?
Form NC-4 EZ is available for individuals who plan to claim either the North Carolina Standard Deduction or the North Carolina Child Deduction Amount, without claiming any other deductions or tax credits. This simplified form is designed to streamline the withholding process for eligible taxpayers.
What should a nonresident alien do regarding the NC-4 form?
Nonresident aliens must use Form NC-4 NRA instead of the standard NC-4 form. A nonresident alien is defined as someone who is not a U.S. citizen and has not passed the green card test or the substantial presence test. It is important for nonresident aliens to accurately complete the appropriate form to ensure proper tax withholding.
How can employees determine their withholding allowances?
Employees can determine their withholding allowances by completing the NC-4 Allowance Worksheet. This worksheet helps individuals assess their eligibility for allowances based on various factors, including federal and state adjustments to gross income, the N.C. Child Deduction Amount, and any applicable tax credits. Employees can choose to claim fewer allowances than they qualify for if they wish to increase the amount withheld from their paychecks.
What should employees do if their withholding allowances change?
If an employee's withholding allowances decrease, they must submit a new NC-4 form to their employer within 10 days of the change. However, if an individual stops being classified as "Head of Household," they are not required to file a new NC-4 until the following year.
What if an employee has more than one job?
Employees with multiple jobs should use one NC-4 Allowance Worksheet to determine the total number of allowances they can claim across all jobs. For accuracy, it is generally recommended to claim all allowances on the NC-4 for the highest-paying job and to claim zero allowances for the others. Additionally, they should consult the “Multiple Jobs Table” to determine if any additional amounts should be withheld.
What happens if incorrect information is provided on the NC-4 form?
Providing inaccurate information on the NC-4 form that leads to a lower amount of tax being withheld may result in penalties. Specifically, if an employee submits a form with information that lacks a reasonable basis and causes a lesser amount of tax to be withheld, they could face a penalty of 50% of the amount that was not properly withheld.
How should employees complete the NC-4 form?
When completing the NC-4 form, employees must use blue or black ink and avoid dollar signs, commas, or any other punctuation marks. It is important to follow the specific instructions for handwritten forms, including setting page scaling to "none" and ensuring that the form is printed on one side only. Employees should also retain a copy of the completed form for their records.
What is the significance of the filing status on the NC-4 form?
The filing status selected on the NC-4 form affects the calculation of withholding allowances. Employees must choose the correct filing status—such as Single, Married Filing Jointly, or Head of Household—because it influences the number of allowances they can claim. Married taxpayers must also agree on how to complete the form based on their chosen filing status, either jointly or separately.
Completing the NC-4 form can be straightforward, but several common mistakes can lead to incorrect withholding amounts. One frequent error occurs when individuals fail to use the correct ink color. The instructions clearly state that only blue or black ink should be used. Using red ink can lead to processing delays or even rejection of the form.
Another mistake involves the omission of required information. Some people neglect to fill out critical sections, such as their Social Security number or filing status. Incomplete forms may result in employers withholding taxes at the highest rate, which can be financially burdensome. Ensuring that all sections are filled out completely and accurately is essential for proper processing.
Additionally, individuals often miscalculate their allowances. The NC-4 Allowance Worksheet helps determine the correct number of allowances based on various factors, including income and deductions. Misunderstanding these calculations can lead to either over-withholding or under-withholding, which can affect tax returns and financial planning. It is crucial to take the time to complete the worksheet accurately to avoid these issues.
Finally, many people mistakenly submit the NC-4 form without reviewing it for errors. Simple mistakes, such as typos or incorrect figures, can have significant consequences. Taking a moment to double-check the form before submission can prevent complications later. By being thorough and attentive to detail, individuals can help ensure that their withholding is accurate and aligns with their financial situation.
The NC-4 form is an important document for employees in North Carolina, as it helps determine the correct amount of state income tax withheld from paychecks. Several other forms and documents are often used alongside the NC-4 to ensure accurate tax reporting and compliance. Below is a list of these forms, along with a brief description of each.
Understanding these forms and how they relate to the NC-4 can help ensure accurate tax withholding and compliance with both state and federal tax laws. If you have questions about these forms or your tax situation, consider seeking assistance from a tax professional.
The NC-4 form is an important document for employees in North Carolina to ensure proper withholding of state income tax. Several other forms serve similar purposes, each tailored to different situations. Below are six documents that are similar to the NC-4 form:
When filling out the NC-4 form, it is essential to follow specific guidelines to ensure accuracy and compliance. Here are eight important do's and don'ts:
By adhering to these guidelines, you can help ensure that your NC-4 form is processed smoothly and accurately.
Here are ten common misconceptions about the NC-4 form, along with explanations to clarify each point:
In fact, you should only use blue or black ink when completing the NC-4 form. Using red ink is not permitted.
You must submit the original form to your employer. Copies are not acceptable.
It's important to use only one form type for your submission. Mixing forms can lead to errors in withholding calculations.
If your withholding allowances decrease, you must file a new NC-4 with your employer within 10 days of the change.
Any employee, regardless of their job status or hours worked, should complete the NC-4 to ensure proper tax withholding.
You may claim fewer allowances than you qualify for, but you cannot claim more than you are entitled to. This helps manage your tax withholding accurately.
Non-resident aliens must use the NC-4 NRA form specifically designed for them to ensure correct tax withholding.
Married taxpayers must also complete the NC-4 form, and both spouses need to agree on how to fill it out based on their filing status.
Different filing statuses have specific requirements and calculations for allowances. It’s important to follow the instructions based on your situation.
It’s best to complete the NC-4 form as soon as you start a new job or have a change in circumstances. This helps prevent any surprises when tax season arrives.
Filling out the NC-4 form is an important step for ensuring the correct amount of state income tax is withheld from your paycheck. Here are some key takeaways to keep in mind:
Understanding these key points can help you navigate the process of completing the NC-4 form and ensure that your tax withholding aligns with your financial situation. Always keep a copy for your records and consult a tax professional if you have specific questions or concerns.