North Carolina issues 2017 withholding tables

North Carolina has issued withholding tables for wage paid on and after January 1, 2017. The tables have been revised to reflect legislative changes which increase the standard deduction amount and reduce the individual income tax rate. North Carolina law requires North Carolina income tax to be withheld from wages at a rate that is 0.1% higher than the individual income tax rate, which has been changed to 5.499%. Therefore the withholding rate on wages paid on or after January 1, 2017, will be 5.599%.

The changes resulted in revisions to the Formula Tables for the Percentage Method Withholding Computations and Formula Tables for Annualized Method Withholding Computations as well as the Wage Bracket Tables. 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 their previous election. All of the tables will be reproduced in the PAYROLL MANAGEMENT GUIDE at ¶7588 and ¶7589 in a future release. (North Carolina Department of Revenue, (2017 Income Tax Withholding Tables and Instructions for Employers (Pub. NC-30, Revised 11-16.))

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