Income Tax Withholding Tables And Instructions For Employers Page 9
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69employee’s wages. Employers may wish to contact
tax from an employee’s regular wages, you can use one
the Employment Security Commission regarding any
of these methods for the supplemental wages:
employment insurance liability.
(a) Withhold a flat 6%, or
Military Spouses. The Military Spouses Residency
(b) Add the supplemental and regular wages for the
Relief Act of 2009 amended the Servicemembers Civil
most recent payroll period this year. Then figure the
Relief Act (“SCRA”) to provide that a spouse shall neither
income tax as if the total were a single payment. Subtract
lose nor acquire domicile or residence in a state when
the tax already withheld from the regular wages. Withhold
the spouse is present in the state solely to be with the
the remaining tax from the supplemental wages. If you
servicemember in compliance with the servicemember’s
did not withhold income tax from the employee’s regular
military orders if the residence or domicile is the same for
wages, use method (b).
both the servicemember and spouse.
Vacation pay is subject to withholding as if it were a
The Act prohibits North Carolina from taxing the income
regular wage payment. If vacation pay is paid in addition to
earned for services performed in North Carolina by a
the regular wages, treat the vacation pay as supplemental
spouse of a servicemember stationed in North Carolina
wages. If vacation pay is for a time longer than your usual
if (1) the servicemember is present in North Carolina
payroll period, spread it over the pay periods for which you
solely in compliance with military orders; (2) the spouse
pay it.
is in North Carolina solely to be with the servicemember;
and (3) the spouse is domiciled in the same state as the
See Federal Publication 15, Employer’s Tax Guide,
servicemember. If all three of the conditions are met, an
for additional information on supplemental wages.
employer is not required to withhold North Carolina tax
Tips treated as supplemental wages. Withhold the
from wages paid to such military spouses. The Act does
income tax on tips from wages or from funds the employee
not apply to military spouses who are domiciled in North
makes available. If an employee receives regular wages
Carolina. Withholding from wages paid to military spouses
and reports tips, figure income tax as if the tips were
domiciled in North Carolina is still required.
supplemental wages. If you have not withheld income tax
Seamen. The Vessel Worker Tax Fairness Act, 46
from the regular wages, add the tips to the regular wages
U.S.C., 11108, prohibits withholding of state income tax
and withhold income tax on the total. If you withheld income
from the wages of a seaman on a vessel engaged in foreign,
tax from the regular wages, you can withhold on the tips
coastwide, inter-coastal, interstate, or noncontiguous trade
by method (a) or (b).
or an individual employed on a fishing vessel or any fish
14. Employee’s Withholding Allowance
processing vessel. Vessels engaged in other activity do
not come under the restrictions; however, any seaman
Certificate, Form NC-4
who is employed in coastwide trade between ports in this
State may have tax withheld if the withholding is pursuant
Each new employee must complete and sign a North
to a voluntary agreement between such seaman and his
Carolina Employee’s Withholding Allowance Certificate,
employer.
Form NC-4. If an employee does not give you a completed
Form NC-4, you must withhold tax as if the employee is
Severance wages. The first $35,000 of severance
single with zero withholding allowances. A certificate filed
wages paid to an employee (whether paid in one year or
by a new employee is effective upon the first payment of
over several years) as a result of the employee’s permanent,
wages thereafter and remains in effect until a new one is
involuntary termination from employment through no fault
furnished unless the employee claimed total exemption
of the employee is exempt from withholding. “Stay-on pay”
from withholding during the prior year. Generally, an
does not qualify as severance wages.
employee claiming exemption from withholding must give
you a new Form NC-4 by December 1st. If the employee
12. Payroll Period
does not give you a new Form NC-4, withhold tax as if
the employee is single with zero withholding allowances.
See Federal Publication 15, Circular E, Employer’s
Important: A military spouse who claims exemption
Tax Guide, for information on payroll period.
from withholding under the Military Spouses Residency
13. Supplemental Wages
Relief Act must submit a new Form NC-4 each year.
The military spouse must attach a copy of their
If you pay supplemental wages separately (or combine
spousal military identification card and a copy of the
them with regular wages in a single payment and specify
servicemember’s most recent leave and earnings and
the amount of each), the income tax withholding method
statement. The military spouse must also submit a new
depends in part on whether you withhold income tax from
NC-4 immediately upon determining that the spouse no
your employee’s regular wages. If you withhold income
longer meets the requirements for the exemption. State
Page 9
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