What are the filing requirements for North Carolina withholding taxes?

In North Carolina, employers must submit withholding tax returns to the NCDOR to report state income taxes withheld from employees. The filing schedule is determined by the employer’s payroll frequency and total tax liability:

• Quarterly Filers: Most small to mid-sized employers file Form NC-5 or NC-5Q (Quarterly Withholding Return) to report total state taxes withheld during the quarter.

• Annual Reconciliation: All employers must file Form NC-3 (Annual Withholding Reconciliation), which summarizes the year’s withholding and reconciles amounts previously reported on quarterly returns.

• Timely Payment: Taxes withheld must be remitted to NCDOR along with the corresponding return by the due date.

Key Points

• Even if no tax was withheld during the period, employers are still required to file the forms to report zero withholding.

• Filing frequency depends on the amount of tax withheld: monthly if over $2,500 per month, quarterly if $2,500 or less per month.

• Employers should retain copies of all filed returns and payments for recordkeeping and potential audits.

• Electronic filing through NC e-Services is encouraged for faster processing and compliance.