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Summary of differences between federal and state regulations
Income tax withholding North Carolina law requires withholding of income tax from:
(a) Salaries and wages of all North Carolina residents regardless of where earned,
(b) Wages of nonresidents for services performed in North Carolina,
(c) Non-wage compensation paid to nonresidents for certain personal services performed in North Carolina, and
(d) Pension payments paid to North Carolina residents if federal withholding is required on the payments.
The tax must be withheld from each payment of wages, and the amount is considered to be held in trust until it is paid to the Department. North Carolina does not use a depository system for income tax withheld. A report of the tax withheld must be filed and the tax paid by the required due date. You are required to report and pay the tax withheld on a quarterly, monthly, or semiweekly basis. Your initial filing frequency is determined by your average monthly withholding as indicated on Form AS/RP 1, Registration Application for Sales and Use Tax and/or Income Tax Withholding. An employer required to file a certain frequency (semiweekly, monthly, or quarterly) because of his average monthly withholding, must continue on that basis until the Department of Revenue authorizes a change to a new filing frequency.
An employer is any person or organization for whom an individual performs any service as an employee. The term includes federal, state, and local governmental agencies as well as religious, charitable, educational, and other nonprofit organizations even though they may be exempt for other tax purposes.
Unemployment taxesAll states finance UC primarily through contributions from subject employers on the wages of their covered workers. In addition, three states (Alaska, New Jersey, and Pennsylvania) collect contributions from employees. These taxes are deposited by the state to its account in the UTF in the Federal Treasury, and are withdrawn as needed to pay benefits.
Many states have adopted a higher tax base than what is provided in FUTA. Hawaii's wage base is usually higher and changes periodically. In all states, an employer pays a tax on wages paid to each worker within a calendar year up to the amount specified in state law. In addition, most of the states provide an automatic adjustment of the wage base if federal law is amended to apply to a higher wage base than that specified under state law. As a result of the many variables in states taxable wage bases and rates, benefit formulas, and economic conditions, actual tax rates vary greatly among the states and among individual employers within a state.
Wages subject to unemployment tax in this state equal $16,200.
Minimum and maximum rates in this state are 0.0 and 5.7 %. Rates apply to experience rated employers only and do not include applicable surtaxes or penalties.
State
Contacts
Income tax withholdingDepartment of Revenue
Unemployment taxesEmployment Security Commission
Regulations
Income tax withholding NC Administrative Code (17 NCAC 06A.0105)
Unemployment taxes NC General Statute - Chapter 96 - Employment Security
Federal
ContactsInternal Revenue Service
Regulations Title 26 Code of Federal Regulations, Internal Revenue