According to this link, North Carolina income tax is required to be withheld from non-wage compensation paid to nonresidents for certain personal services rendered in NC.So now you need to figure out how to reclaim this tax.
- you will need to report this NC-1099-PS in your federal return. To do this you will go to federal>wages and income>all income>less common income>show more
- scroll down to Miscellaneous Income, 1099-A, 1099-C Start
- scroll down to other report able income start say yes when it asks you if you have any other taxable income
- in the next page, enter NC-1099 PS as a description and put in an amount. Now the income has been reported
Secondly you have to report the state tax that was withheld.
- Go to federal>deductions and credits>all tax breaks>estimates and Other Taxes Paid>show more>
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income tax paid>start>say yes at the next screen>Other Income Taxes Paid in 2019>Withholding not already entered on a W-2 or 1099>start
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Tell us about any tax withholding that you haven't entered yet>State Withholdings>select the drop down and pick North Carolina and then the amount.
Thirdly, you will go state and start preparing your North Carolina state non-resident return because you will need to separate the NC income from your other income.
- After you answer some preliminary information, you will start coming to a series of income allocations that need to be made such as W2 information and other income items. Anything that is NOT NC sourced income, you will make the selection in the drop-down as not NC sourced income
- You will come to another wage allocation screen and the only thing you will enter is the amount that is listed as Other Income/Loss on Federal Return. This should be the amount that is listed on your NC-1099-PS that you reported in the federal return.
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