Guide to North Carolina Individual Income Taxes

Navigating your way through all the rules and regulations regarding state income taxes can be difficult. This guide covers the basics of North Carolina individual income taxes. It should help you decide whether you should consider filing a North Carolina income tax return, and it will also explain how to get started. It is important that you download and read the instructions to any tax form every year before preparing the return. Tax return instructions may change from year to year, and reading the form's instructions is the quickest way to stay up to date on any developments. Most states will typically summarize any changes from the prior year at the front of the instructions booklet.

The North Carolina individual income tax form instructions booklet can be downloaded here: http://www.dor.state.nc.us/downloads/individual.html

Who is required to file a North Carolina Individual Income Tax Return?
In general, you should file a return if you meet one of the following criteria:

1. A North Carolina resident who meets certain gross income criteria, typically above $5,500 for an individual and above $11,000 if married filing jointly. See instructions for Form D-400 for other taxpayer categories (Head of Household, Qualifying Widower, Married Filing Separately, or Over 65)
2. A person who resided in North Carolina for only part of the year, but received income while a resident of North Carolina.
3. A non-resident of North Carolina who made income on property located in or a business carried on in North Carolina.

Please refer to the instructions to Form D-400 to make a final determination of whether or not you should file a North Carolina Individual Income Tax Return.

Important item to note regarding refunds: If you had North Carolina income tax withheld during the year, but are not required to file a return based on the amount of your income, you must still file a return in order to receive a refund of tax withheld.

Important item to note regarding joint returns: Married people are required to file a joint North Carolina return if they also filed a joint federal return and both people were residents of North Carolina OR both people had taxable income in North Carolina.

Quick Facts about North Carolina Individual Income Taxes
• What is the North Carolina Department of Revenue website?www.dornc.com
• What tax form should you file? D-400
• When is the tax return due? April 15th for calendar year taxpayers
• What are the North Carolina Individual Income Tax Rates? 6% to 8.25%
• Where can I obtain blank tax forms?
o Online: www.dornc.com
o In person:

Asheville
2800 Heart Drive
Asheville, NC 28806
(828) 667-5087

Charlotte
Woodlawn Green Office Complex
5111 Nations Crossing Road
Charlotte, NC 28217
(704) 519-3000

Elizabeth City
401 S. Griffin Street, Suite 300
Elizabeth City, NC 27906
(252) 331-4746

Fayetteville
225 Green Street, Suite 800
Fayetteville, NC 28301
(910) 486-1211

Greensboro
5 Centerview Drive
Lenoir Building, Koger Center
Greensboro, NC 27407
(336) 315-7001

Greenville
2995 Radio Station Road
Greenville, NC 27835
(252) 830-8534

Hickory
112 2nd Street, PI. SE
Hickory, NC 28602
(828) 327-7474

Raleigh
1st Floor, South Core, Revenue Building
501 N. Wilmington Street
Raleigh, NC 27604
(919) 733-3981

Rocky Mount
Suite 239 Station Square
Rocky Mount, NC 27804
(252) 442-3117

Wilmington
33 Darlington Avenue
Wilmington, NC 28403
(910) 251-5752

Winston Salem
8025 Northpoint Boulevard, Suite 250
Winston-Salem, NC 27106
(336) 896-7024

• Where should you mail your completed form?

If you are due a refund: N.C. Department of Revenue
P.O. Box R
Raleigh, NC 27634-0001

If you are not due a refund: N.C. Department of Revenue
P.O. Box 25000
Raleigh, NC 27640-0640

• Who can you call if you have questions?

Call 1-877-252-3052 toll-free and press "3" for individual income tax questions.

Tax Payments
You can pay your taxes online using a bank draft, credit card, or debit card (MasterCard or Visa only). If paying by check or money order and mailing in your return, make it payable to the "N.C. Department of Revenue." The state also requests that you write "2006 (or other tax year) D-400" and your name, address, and social security number on the check.

How to File a Tax Return Extension
You can apply for an automatic 6-month extension by filing Form D-410, Application for Extension for Filing Individual Income Tax Return. This form must be filed by the due date of your return (April 15th). You will then have until October 15th to file your tax return. You should attach a copy of the extension request to your return when you eventually file it.

Tax Return Penalties
North Carolina assesses two standard penalties, Failure to File Penalty and Failure to Pay Penalty. These penalties are exclusive of one another, meaning you must pay both of them if they both apply to your circumstances. The calculation of these penalties is beyond the scope of this article, but the instructions to Form D-400 describe them in detail. Other penalties may apply, but only in instances of negligence, filing a frivolous return, or fraud. In addition to owing penalties, you may also be liable for interest on tax due but not paid by the due date of the return (April 15th).

Status of Tax Refunds
Visit www.ncdor.com, and click on Electronic Services, then Individuals. Here you can check the status of your individual income tax refund. If your check has been issued, but you have not received it yet, you can find out about the check's status by calling 1-877-252-4052 toll-free. The state suggests waiting to call for a certain number of weeks after you file your return. If you call before this time, you will most likely be informed that your check has not been written. Suggested waiting times are as follows:

• 4 weeks if you filed electronically
• 8 weeks if you filed your return in January or February
• 10 weeks if you filed your return in March
• 12 weeks if you filed your return in April

***You will receive your refund faster if you file electronically and elect to receive the refund via direct deposit. You can direct your deposit into a checking or savings account.***

Record Retention Requirements
You should retain support for all amounts reported on your return for at least three years. This includes a copy of your federal tax return, cancelled checks, receipts, and any other documentation needed to support deductions or tax credits claimed on your return. Failure to do so may result in the state disallowing some or all of your deductions or credits. You should keep proof of tax paid to the state (canceled check, money order stub, etc.) for at least five years.