If you've earned enough taxable income as a resident or nonresident in 2021, you'll need to file a state tax return in North Carolina. The state offers convenient resources online to obtain the necessary tax forms, make payments, stay updated on your refund status and get an extension if needed. You'll also be able to learn about the variety of tax credits available that can help reduce your liability.
Who Must File North Carolina Income Taxes?
North Carolina's tax filing rules say that full-year residents, part-year residents and nonresidents may all need to submit state returns. It depends on whether these individuals earn a gross income over the thresholds set each calendar year by filing status. Taxable income can come from sources such as self-employment, employee wages, gambling activities and rental properties.
While a single taxpayer would file a North Carolina return with a gross income over $10,750, this amount goes up to $21,500 when married and filing jointly. If you're married but filing separately from your spouse in North Carolina, the gross income threshold can be $0 when your spouse claims itemized deductions or $10,750 when they don't claim them.
What Are the Forms to Use?
Starting in January 2022, the North Carolina Department of Revenue will have the 2021 state tax forms available to download along with instructions for completing them. You'll be able to choose between handwritten and fillable PDF files.
Whether you're a resident or nonresident, you can expect to complete the same Form D-400 tax return that asks questions about your filing status, residency, income, credits and deductions and taxes paid. Depending on your tax situation, you may need to download other forms such as Form D-400TC for individual tax credits, Schedule A for itemized deductions and Schedule PN for taxpayers who aren't full-time North Carolina residents.
What Is the Tax Rate in North Carolina?
For the 2021 tax year, individuals in North Carolina pay a flat state income tax rate of 5.25 percent.
What Are the Filing Deadline and Extension Process?
Like the IRS does for your federal income tax return, the state of North Carolina usually uses the due date of April 15 for your state return. However, this day falls on a holiday in 2022. Therefore, the tax filing deadline will move to the next business day: April 18, 2022.
If you don't think you'll file your North Carolina return by this due date, you can ask the state to give you a six-month extension through mid-October. To avoid a late filing penalty, you'll need to complete an extension form called D-410 before the end of April 18, 2022. You can do this on the revenue department's website.
In addition, you'll still want to submit a payment for your taxes owed since the extension is only for the return itself and not the unpaid taxes. The online Form D-410 submission process will give you an option to conveniently pay the taxes.
What Are the Penalties for Late Filing and Underpayment of Taxes?
Unless you get a state tax return extension, you'll have to pay a failure to file penalty if you don't submit your North Carolina return by April 18, 2022. The monthly penalty rate is 5 percent of the unpaid tax amount, and this can continue up to 25 percent of the total amount.
The North Carolina Department of Revenue will charge a penalty for underpayment of taxes even if you have an extension. This means you'll pay 10 percent of your unpaid tax amount in penalties along with interest charged on the balance.
You'll eventually get a Notice of Collection from the state if you end up with unpaid taxes. Once you receive this, you may be able to set up an installment agreement rather than pay the whole tax amount at once.
Where Do I Mail/E-file My North Carolina Return?
You're unable to e-file your North Carolina state tax return through their website. Instead, the state has a program called NCfreefile that lets certain taxpayers e-file free through third-party services such as TaxAct, 1040Now, OnLine Taxes, TurboTax and TaxSlayer. Each provider has its own income limits, age restrictions, residency status requirements and allowance for certain tax credits.
If you don't qualify for NCfreefile, you can e-file through any other free or paid tax preparation software supporting North Carolina tax returns. You can also have a professional tax preparer e-file the return along with your federal tax return.
You can alternatively download your tax forms and mail them to the North Carolina Department of Revenue at one of these two addresses:
- Not expecting a refund: P.O. Box 25000, Raleigh, N.C. 27640-0640
- Expecting a refund: P.O. Box R, Raleigh, N.C. 27634-0001
How Do I Pay Taxes Due?
When you e-file your North Carolina tax return, you'll often pay owed taxes as one of the last steps presented by the tax software. However, you can also conveniently pay the North Carolina Department of Revenue directly using the online payment system. You can use your bank account, debit card or credit card. If you pay with a card, expect a convenience fee to apply.
Alternatively, you can pay the state taxes by phone or mail or in person. You'll call 1-877-252-3252 and follow the prompts to speak to a representative for a tax payment. If you mail a money order or check, send it to the North Carolina Department of Revenue's address: P.O. Box 25000, Raleigh, NC 27640-0002. If you'd like to pay in person, locate the service center in your area and consider making an appointment.
Where Can I Check My North Carolina Refund Status?
Once you file your North Carolina tax return, you should normally receive your tax refund within six weeks if you e-file or within 12 weeks if you mail the return. However, this can take longer if some issue occurs verifying your tax information or identity.
The state allows taxpayers to easily check the status of their state income tax refund by phone or online. To use the quickest option, visit the "Where's My Refund?" page. After you input the expected refund amount plus your Social Security number, you'll see which stage your return is in. Otherwise, call 1-877-252-4052, follow the prompts to find the refund status option and then provide information to verify your identity.
What About North Carolina Taxes if You're Self-employed?
If you're self-employed and file a regular Form 1040 for your federal income, you'll likely file an individual income tax return in North Carolina and pay the usual tax rate. A difference from regular wage earners, however, is that you'll need to send the state your estimated tax payments every quarter. You can check with a tax professional if you're unsure about your classification for taxes.
What About North Carolina Taxes if You're a Business?
If you have a corporation in North Carolina, you'll pay a lower income tax rate of 2.5 percent than you would as an individual. The tax forms you'll use will depend on the type of corporation structure you have and can include Form CD-405 for a C-Corp or CD-401-S for an S-Corporation.
You can view the corporation section of the North Carolina Department of Revenue's website to learn more about business taxes, make estimated payments, see tax forms, review filing requirements and explore state programs.
Rates and dates in this article are correct as of publication. But check for any changes with the North Carolina Department of Revenue (NCDOR) before you file.
- North Carolina Department of Revenue: Individual Income Filing Requirements
- North Carolina Department of Revenue: Frequently Asked Questions About Your N.C. Individual Income Tax Return
- North Carolina Department of Revenue: General Refund Information
- North Carolina Department of Revenue: When, Where, and How to File Your North Carolina Return
- North Carolina Department of Revenue: Extension for Filing Individual Income Tax Return
- North Carolina Department of Revenue: Installment Payment Agreements
- North Carolina Department of Revenue: eFile for Individuals
- North Carolina Department of Revenue: Payment Options
- North Carolina Department of Revenue: Tax Rate Schedules
- North Carolina Department of Revenue: Individual Income Tax Forms & Instructions
- North Carolina Department of Revenue: Nonresidents and Part-Year Residents
- North Carolina Department of Revenue: eFile Information: NCfreefile and eFile for a fee
- North Carolina Department of Revenue: Corporate Income and Franchise Tax
- North Carolina Department of Revenue: Corporate Income Tax Rates
Ashley Donohoe has written about business and technology topics since 2010. Having a Master of Business Administration degree, bookkeeping certification and experience running a small business and doing tax returns, she is knowledgeable about the tax issues individuals and businesses face. Other places featuring her business writing include Zacks, JobHero, LoveToKnow, Bizfluent, Chron and Study.com.