North Carolina has issued wage bracket and percentage method withholding tables for wages paid on and after January 1, 2016. The percentage method tables are reproduced in this Report Letter on pages 15–28. All of the tables will be reproduced in the Payroll Management Guide at ¶7588 and ¶7589 in a future release.
The tables have been revised to reflect legislative changes which require North Carolina income tax to be withheld from wages at a rate that is 0.1% higher than the individual income tax rate, which remains at 5.75%. Therefore the withholding rate on wages paid on or after January 1, 2016, will be 5.85%.
An increase to the standard deduction required adjustments to the Multiple Jobs Table and the allowance worksheets for Forms NC-4, NC-4 NRA, and NC-4P. The changes are minor and employees are not required to submit a new NC-4 unless the number of withholding allowances to which they are entitled decrease or the employee has claimed exemption from withholding. Pension and annuity recipients who have previously elected not to have state income tax withheld from their payments do not have to submit a new NC-4P unless they are revoking the previous election.
Withholding is not required on compensation paid to an ITIN holder who is temporarily admitted to the United States to perform agricultural labor or services under an H-2A visa and who is not subject to federal income tax withholding under Code Sec. 1441.
Beginning with the Annual Withholding Reconciliation, Form NC-3, which for tax year 2016 is due to the Department by January 31, 2017, a failure to file penalty will be assessed on any Form NC-3 filed after January 31, 2017.
The forms below are no longer included in the publication. The forms are available at http:// www.dornc.com/downloads/wh_forms.html. The forms can also be requested by calling 1-877-252-3052. (1) NC-BR Business Registration Application for Income Tax Withholding, Sales and Use Tax, and Machinery and Equipment Tax, (2) Form NC-4 EZ and Form NC-4 Employee’s Withholding Allowance Certificate, (3) Form NC-4 NRA Nonresident Alien Employee’s Withholding Allowance Certificate, and (4) Form NC-4P Withholding Certificate for Pension or Annuity Payments. (North Carolina NC-30 (12-15), 2016 Income Tax Withholding Tables and Instructions.)
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