To: University Business Managers
From: Elizabeth C. (Betsi) Snipes, Director, Payroll Services
Date: February 18, 2014
The Payroll Services department previously provided information regarding the new NC-4 form, “Employee’s Withholding Allowance Certificate,” and indicated that all employees must provide either Form NC-4 EZ or Form NC-4 for calendar year 2014. One issue that arose was whether nonresidents of North Carolina should submit the new NC-4 form. University employees who perform any services within the State of North Carolina during any part of the calendar year are required to submit a completed and signed Form NC-4 to Payroll, regardless of residence location.
However, University employees who both reside and work outside the State of North Carolina for the entire calendar year are not subject to North Carolina state income tax withholding as noted in N.C. Department of Revenue NC-4 instructions:
EXCERPT: 2014 Income Tax Withholding Tables and Instructions for Employers
Section 5 – Treatment of Residents and Nonresidents
(b) Nonresident employees. A nonresident employee is subject to North Carolina withholding on any part of his wages paid for performing services in this State. Any relief from double withholding must be granted by the employee’s state of residence.
Therefore, if a University employee is BOTH a nonresident of N.C. and performs all services outside the State of N.C., the NOT SUBJECT TO NC INCOME TAX WITHHOLDING FORM may be submitted to document that the employee is not subject to N.C. income tax withholding.
cc: HR Officers