NORTH CAROLINA
separate property state

 

Military Income:   Fully taxable.

Military Spouse Residency Relief Act:  Service member in state soleley in compliance with military orders. Spouse in state solely to be with service member. Spouse must be a resident of same state as service member. Complete Form ND-4, Employee's Withholding Allowance Certificate annually and provide to employer by December 1.

Forms Used: 

Filing Status:  Generally, the same as federal return.  If either spouse is a nonresident and had no North Carolina taxable income for the tax year, you must check married filing separately and submit a complete separate federal return or a schedule showing the computation of separate taxable income and attach it to the North Carolina return. 

Attach Copy of Federal Return:  Yes

 Not Taxed: 

Other State Tax Credit:   Available.  Attach North Carolina Form D-400TC and copy of other state return.

Miscellaneous:  For residents only:  credit for day care expenses, credit for children, and charitable contributions. 

Where to Mail:
Refunds: Tax Due:
NC Department of Revenue
P O Box R
Raleigh, NC 27634-0001
NC Department of Revenue
P O Box 25000
Raleigh, NC 27640-0640
Refund Inquiry:  (919) 733-4052  Forms:  (919) 715-0397
General Information(877) 252-3052 Electronic Filing(919) 733-1674
Other Info:  Website:  www.dor.state.nc.us
North Carolina Department of Revenue
P O Box 25000
Raleigh, NC  27640
 
E-filing Info:  North Carolina has no e-file signature form.  It is included with the federal 8453.  Retain information for 3 years.
Tax Form Instructions:
Resident Instructions Non-Resident Instructions

Military Specific Instructions

 

Filing Status Scenarios

1.  Taxpayer and Spouse Residents (Use also for Single Taxpayer)
2.  Taxpayer and Spouse Different States of Residence
3.  Taxpayer and Spouse Non-Residents
4.  Taxpayer Non-Resident - Spouse Part-Year Resident
5.  Taxpayer Married or Single - Resident but Income from Other State
6.  Amended Return

 

1.  Taxpayer and Spouse Residents (Use also for Single Taxpayer) - Taxpayer and spouse are both North Carolina residents, lived at their present location all year, and one or both had income.

Main Info Screen.

 North Carolina D-400 Form.  A joint resident North Carolina income tax return is prepared.  Leave County Code blank unless the address on the return is located in North Carolina.  County codes are located here. 

 

North Carolina D-400 Form.  On the bottom of Page 1 of the North Carolina D-400 you must check the VITA/TCE box if you want to e-file the return.

Complete all other fields and forms with red or required information.

2.  Taxpayer and Spouse - Different States of Residence - Taxpayer or spouse is a resident of North Carolina, while the other member is a resident of a different state.  A North Carolina income tax return must be prepared due to the taxpayer or spouse having North Carolina earned income.

Main Info Screen.  If one spouse is a domicile (resident) of another state, the parties should file Married Filing Separate.  For this example, the taxpayer is a resident of North Carolina while the spouse is a resident of North Dakota.

 

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.

 

North Carolina Form D-400.   A separate resident North Carolina income tax return should be prepared.  Leave County Code blank unless the address on the return is located in North Carolina.  County codes are located here. 

 

Designate the North Carolina resident by checking Taxpayer or Spouse accordingly under Filing Status, Line 3.  Checking the appropriate box will create a Federal 1040 form specifically for North Carolina with the filing status changed to Married Filing Separately.  This is necessary to properly figure the North Carolina tax return.

North Carolina D-400 Form.  On the bottom of Page 1 of the North Carolina D-400 you must check the VITA/TCE box if you want to e-file the return.

North Carolina Form 1040 - US Individual Income Tax Return for N.C.  If applicable, complete the dependent information.  This form will be generated to switch the federal return from a married filing joint return to a married filing separate return for the North Carolina Resident.  This is only for the sake of preparing the North Carolina tax return.  It will not change the federal return in anyway.

Review the remainder of the North Carolina Form D-400 to ensure the other state income is being subtracted correctly.  Complete all other fields and forms with red or required information.

3.  Taxpayer and Spouse Non-Residents - Taxpayer and spouse are residents of a different state.  The spouse and taxpayer must file a North Carolina tax return due to one or both having North Carolina earned income.

Main Info Screen.  If both members are residents of another state, the parties should file as nonresidents.  For this example, the taxpayer and spouse are both residents of Wisconsin but must file a North Carolina income tax return because the spouse worked in North Carolina.

 

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.

 

North Carolina Form D-400.   A joint non-resident North Carolina income tax return should be prepared.  Leave County Code blank unless the address on the return is located in North Carolina.  County codes are located here.  Answer the question as to whether the taxpayer and/or spouse were nonresidents of North Carolina for the entire year.

 

North Carolina D-400 Form.  On the bottom of Page 1 of the North Carolina D-400 you must check the VITA/TCE box if you want to e-file the return.

North Carolina Form D-400, page 2.  Line 12 shows the percentage of non-resident income being taxed. 

Review the remainder of the North Carolina Form D-400 to ensure the other state income is being subtracted correctly.  Complete all other fields and forms with red or required information.

4.  Taxpayer Non-Resident - Spouse Part-Year Resident - Taxpayer and spouse moved to or from North Carolina during the tax year.  The taxpayer is a resident of a different state.  The Spouse is a part-year resident of North Carolina.  The Spouse and taxpayer must file a North Carolina tax return due to one or both of them having North Carolina earned income and possibly income from another state.

Main Info Screen.  For this example, the taxpayer is in the military and a resident of Indiana.  The taxpayer and spouse moved from North Carolina to North Dakota during the year.  The spouse was a resident of North Carolina but is now changing their residency to North Dakota for tax purposes.   The spouse therefore was a part-year resident of both North Carolina and North Dakota and must file a North Carolina income tax return because the spouse worked in North Carolina.

 

Part Year Resident States Worksheet.  Review form to ensure income is split correctly for the appropriate states.

 

North Carolina Form D-400.   A married filing separate part-year resident North Carolina income tax return should be prepared. Leave County Code blank unless the address on the return is located in North Carolina.  County codes are located here.  Answer the question as to whether the taxpayer and/or spouse moved into or out of North Carolina during the year.

 

Designate the North Carolina resident by checking Taxpayer or Spouse accordingly under Filing Status, Line 3.  Checking the appropriate box will create a Federal 1040 form specifically for North Carolina with the filing status changed to Married Filing Separately.  This is necessary to properly figure the North Carolina tax return.

North Carolina D-400 Form.  On the bottom of Page 1 of the North Carolina D-400 you must check the VITA/TCE box if you want to e-file the return.

North Carolina Form D-400 - page 2.  Line 53 shows the percentage of non-resident income being taxed.  This section is used to subtract out all the other-states (Indiana and North Dakota) income.  You must enter the dates of residency.

Review the remainder of the North Carolina Form D-400 to ensure the other state income is being subtracted correctly.  Complete all other fields and forms with red or required information.

5.  Married or Single Military Resident of North Carolina with Income from Another State  - Taxpayer is single.  The taxpayer must file a North Carolina tax return due to him or her having North Carolina earned income.

Main Info Screen.  For this example the taxpayer is a military member stationed in North Dakota but a resident of North Carolina.  The taxpayer had a job in North Dakota therefore having North Dakota earned income.

 

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.

 

North Carolina D-400.  A resident North Carolina income tax return is prepared.  North Carolina taxes residents on income from all sources, even income earned while living in another state (North Dakota as in this example).  Leave County Code blank unless the address on the return is located in North Carolina.  County codes are located here. 

North Carolina D-400 Form.  On the bottom of Page 1 of the North Carolina D-400 you must check the VITA/TCE box if you want to e-file the return.

North Carolina Form D-400TC, Individual Tax Credits.  North Carolina Form D-400TC must be added to the tax return.  The Out-of-State Tax Credit Worksheet must be prepared to give a credit for taxes paid to another state (North Dakota). You must complete the other states tax return first, then enter the amount of tax from the other states tax return.  This is not the amount the taxpayer had withheld from his or her pay but the amount of tax imposed on them.  Line 2 is the amount of income earned in the other state (North Dakota).  Line 6 is the amount of income tax liability on the (North Dakota) tax return.  A copy of the other state's return must be attached to the North Carolina return if not e-filed.

 

Complete all other fields and forms with red or required information.

6.  Amended Return  - An amended North Carolina return must be filed because the taxpayer received new tax information after their North Carolina return was filed.
Federal 1040X Form.  Before making any changes to the tax return add the US 1040X form to the tax return.  You must check the box under Income and Deductions to lock in the entries in Column A - Original amount or as previously adjusted.

North Carolina D-400X - Amended Individual Tax Return.  Add the North Carolina D-400X Form to the return.  Answer the questions as in the example.  You must check the box to lock in the entries in Column A - As originally reported or as adjusted, before making any changes to the return.

Make whatever changes are required to the federal tax return.  For this example, a new W-2 was received.

North Carolina D-400X - Amended Individual Tax Return.  Return to the North Carolina D-400X form to determine if the taxpayer is receiving an additional refund or owes money.

North Carolina D-400X - Amended Individual Tax Return, Page 2.  On Page 2 you must enter an explanation for why the Amended Return is being prepared.  Enter the current date in the Date field. 

Amended returns can not be e-filed.  The taxpayer must mail the federal 1040X and any state amended returns if required to be filed.