How to Pay North Carolina State Tax on Social Security

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The federal government may tax up to 85 percent of your Social Security or Railroad Retirement benefits when you file your federal income taxes. However, many states, including North Carolina, exempt this income from your state taxes. To ensure that you do not pay unnecessary state taxes on your Social Security benefits, check your federal return to determine how much of your Social Security benefits were included in your taxable income before filing your state tax return.

Check your federal income tax return to determine how much of your Social Security benefits were included as taxable income. This information is on line 20b if you used Form 1040 or line 14b if you used Form 1040A.

Report the taxable amount of your Social Security benefits on line 40 of North Carolina income tax Form D-400. This amount will be one of your available deductions on your North Carolina tax return.

Add the deductions that you have claimed on lines 38 through lines 49 of North Carolina Form D-400 and report the total on line 50. You will subtract this amount from your taxable income, which will reduce your North Carolina tax bill.

Tips

  • According to Kiplinger, 36 states do not tax Social Security benefits.

Warnings

  • You cannot deduct Social Security or Railroad Retirement benefits on your North Carolina return if they are not included in your federal taxable income.

References

About the Author

Based in the Kansas City area, Mike specializes in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

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