PY resident and non-resident taxable percentage

[itsme1]

How is this calculated?  Specifically for NC D-400 Line 13.   My dates of residency are correct, but the entry  looks wrong vs my calculation based on % of the year as NC resident. 

[AmyC · Accepted solution]

1. How this is calculated

NC is among the majority of states that tax a nonresident or part-year resident using apportionment/ allocating the tax. The full income from everywhere is reported.

1. NC will look at your total family income for the year and determine the tax on that amount. 
2. Then, they look at what percentage of the income was actually from NC.
3. NC multiplies the percentage of NC income times the NC tax.

For example:

• NC tax on your federal income is $8,000
• But only 10% of your income was earned in NC
• NC tax liability will be 10% of $8,000 or $800.

2. Line 13 is the NC percentage of total income. Dates of residency are not related to how SC taxes the income.

[itsme1]

Thank you AmyC.  very comprehensive.

Your  2nd bullet under Example:  how do they arrive at 10%?

[DawnC]

Amy was using the 10% as an example.   To find out what percentage applies to your situation, you would take your total income and divide that by the portion that is NC sourced, so it is not a percentage of time you lived in NC, but rather, how much of your total income was sourced in NC.

NC Tax = Tax on full-year income × (NC income ÷ total income).

NC Tax Rates

[itsme1]

Thank you.  Yes I understand it is an example.     But HOW is the % calculated?.   I spent 59 days of 2025 as resident in the state to which we moved.   To me, this means I spent 16% of the year as a resident in this state.  Is Amy's example based on 10% of the calendar year?    Because if I calculate based on your recommendation of "you would take your total income and divide that by the portion that is NC sourced".  I get a much different answer unless we have different definitions of "NC sourced"..

[DawnC]

The amount of days doesn't matter - NC sourced is any income attributable to the state of NC.    How to allocate income for part year returns

Look at Schedule PN with your NC tax return.  Here is what it shows: 

• Calculates a ratio: (NC Source Income) / (Total Federal Income). This percentage is used to determine the portion of the standard deduction or itemized deductions allowed.
• Income Allocation:
  • While a Resident: All income earned from all sources is taxed.
  • While a Non-Resident: Only income derived from North Carolina sources is taxed.
• Tax Rate: A flat rate of 4.25% applies to the adjusted NC taxable income.