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North Carolina State tax

My son in law had $721.00 withheld from his W2....He lives and works in north carolina

Hes getting all of it back..Is that correct?

I live in CT so I'm unsure of NC law

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3 Replies
Vanessa A
Employee Tax Expert

North Carolina State tax

Possibly. It depends on his income and what credits he qualifies for and his marital filing status.  NC does have a $125 Child Tax Credit and some historic structures credits.  It also uses the Federal Adjusted Gross Income as a starting point, so if his income was less than $12,950 for federal, then he would not have any state income.  There is an income deduction of up to $3,000 for each qualifying child on the NC return. 

 

Did he itemize his NC return?  How much were the itemized deductions if so?

 

It comes down to does he have taxable income?  If he does, then how much taxable income does he have?  If his income is less than his standard or itemized deductions and Child Deduction, then he would get it all back.

 

If this is not the case, then it is possible that there is an entry error on the W2 that was entered in the federal section. Did you make an adjustment to the income in the state section?

 

Look at lines 6 through 14 to see how his taxable income was arrived at and 15 of the D-400 to see the taxable income.  You can see the D-400 by selecting Tax Tools>>Tools>>View Tax Summary>>Preview My D-400.

 

If the income doesn't make sense, start by walking back through the state questions, then go to the W2 to see if there is state income in box 16 on the W2.  You can get there by clicking Federal>>Income and Wages>>Edit on the summary screen next to the W2. 

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North Carolina State tax

He is married filing joint...has a W2 but also has a side business only issuing 1099NEC

They have 3 children and own a home

The amount of State tax withheld from this W2 was $716.00 and thats the refund as well

the W2 is $32,000...so the taxable income after the standard deduction is only $3900.00

Vanessa A
Employee Tax Expert

North Carolina State tax

The NC tax rate for 2022 is 4.99%.  This would mean taxes of $194.61.  If he then received a child tax credit of $125, that would lower it to $49.  

 

It is possible there is another credit in there that is removing that $49.  

 

What is on line 16?  Is it $194.61?

 

If you are using the desktop version, you can right click on line 16 and choose data source.  This will let you see what the additional credits consist of. 

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