North Carolina increases income tax rates with Surtax

September 28, 2009

Beginning with your North Carolina 2009 tax return, your overall top rates may increase based on a surtax.  This is an increase to the top tier rates if your taxable income is more than $100,000.  Its what we otherwise call a “TAX INCREASE” for North Carolina sources of income.  Just another reason to prepare with good tax planning.

Surtax Percentage TableFiling StatusNC Taxable Incomeshown on Line 13Surtax PercentageMarried Filing Jointly/Surviving SpouseMore than $100,000 up to $250,0002%Married Filing Jointly/Surviving SpouseMore than $250,0003%Head of HouseholdMore than $80,000 up to $200,0002%Head of HouseholdMore than $200,0003%SingleMore than $60,000 up to $150,0002%SingleMore than $150,0003%Married Filing SeparatelyMore than $50,000 up to $125,0002%Married Filing SeparatelyMore than $125,0003%

For example, if your filing status is “married filing jointly” and your North Carolina taxable income shown on Line 13 of Form D-400 is $150,000, you would compute your “regular” state income tax on Line 14 and then multiply that amount by 2 percent.  The result would be added to your “regular” tax on Line 14 to give you your total tax liability. Then you subtract credits, withholding, payments, etc., to find out if you are due a refund or if you have to pay any additional tax.

Note:  there is no penalty (interest) for underpayment of estimated tax if the underpayment is because of the surtax.

For further information, please see the North Carolina Department of Revenue site.