The North Carolina Department of Revenue Announces That Employers Must Collect New Forms NC-4, Employee’s Withholding Allowance Certificate, for 2014.
As we have heard on the news, beginning in January 2014, the North Carolina personal income tax rate drops to 5.8%. Previously, the North Carolina individual income tax rates were “graduated” and ranged from 6% to 7.75%. That is the good news.
The bad news is that the NC Department of Revenue issued a release on November 12, 2013, advising that all employers must have their employees provide a new Employee’s Withholding Allowance Certificate (either Form NC-4-EZ or Form NC-4). The new form must be completed and provided to the employer so that the correct amount of North Carolina income tax can be withheld for pay periods beginning in 2014.
Similarly, the NC Department of Revenue announced that all recipients of pension or annuity payments must complete and provide to their payor a new withholding certificate for pension or annuity payments (Form NC-4P), in order to insure the payor will withhold the correct amount of North Carolina income tax from any pension payments made on or after January 1, 2014.