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For 2023 I will be living in Montana but earning income in North Carolina. Will I face any penalties for waiting till the end of year to pay my owed MT statetaxes?

Next filing season I was going to file a non resident and resident state return. When my NC state taxes are refunded back to me I was going to use that to pay my Montana owed state taxes at the same time. Was wondering what/if any tax penalties I would incur waiting till then to pay my Montana state taxes.
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3 Replies
DavidD66
Expert Alumni

For 2023 I will be living in Montana but earning income in North Carolina. Will I face any penalties for waiting till the end of year to pay my owed MT statetaxes?

You will be subject to a penalty for underpayment of estimated tax, for paying this year's Montana state tax next year.  If you pay after the filing deadline, you will also be subject to a late payment penalty.  

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For 2023 I will be living in Montana but earning income in North Carolina. Will I face any penalties for waiting till the end of year to pay my owed MT statetaxes?

I would be paying the owed Montana taxes all at once before the filing Deadline April 15th 2024. Are you referring to quarterly filing deadlines?

DMarkM1
Expert Alumni

For 2023 I will be living in Montana but earning income in North Carolina. Will I face any penalties for waiting till the end of year to pay my owed MT statetaxes?

Federal and state taxes are pay-as-you-go, so the deadlines are the quarterly deadlines for paying estimated taxes.  So you would be subject to late penalties for each quarter.  

 

Having said that, I'm not sure why you are having NC withhold taxes only to have them refunded to you; that would indicate the income is not NC sourced.   If you did not physically work in NC you don't need to have NC taxes withhold but instead you need MT taxes withheld.  You need to submit Montana form MW-4 (here) to your employer to have MT withhold.  You will need to file the NC non-resident for 2023 to get a refund of any NC withholding so far in 2023.  

 

If on the other hand if you actually worked in NC then NC should withhold because that is NC source income and you would claim a credit on your MT taxes for the taxes paid to another state thereby avoiding the late penalties because you are meeting the tax requirements of NC.  

 

Here is a link to the MT Department Revenue discussion on the credit for taxes paid to another state.

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