NC Military Spouse Return

[Burke]

I cannot find any special instructions for these on NCDOR. Assume still cannot be efiled? Mark "Military Spouse Relief Act" at top of return? For MFJ, only spouse had NC income, but both have to sign form? Tks.

[FEDUKE404]

Solution

See page 6 of the NC Form D-400 instructions:

http://www.dornc.com/downloads/D401.pdf

If the spouse is not originally a resident of NC, i.e. from another state accompanying spouse who is on active duty in NC, wages should be exempt from taxation by NCDOR.

If that applies, you should file a NonResident return for NC. Lines 51-53 of Form D-400 will be adjusted accordingly based on your input. That tax return can easily be efiled, one would think.

FE

[Burke]

Yes, I had that. And I did complete the D-400 for a non-resident. I did not see anything I could check to alert that this is a MSRA return, and last year it was different. TP had to mail in, mark MSRA at top, attach orders, etc. So I will give the efile a go. VA has a special form, one page, and it has to be paper-filed.

[FEDUKE404]

Not sure if "proof" is needed

Yes, I had that. And I did complete the D-400 for a non-resident. I did not see anything I could check to alert that this is a MSRA return, and last year it was different. TP had to mail in, mark MSRA at top, attach orders, etc. So I will give the efile a go. VA has a special form, one page, and it has to be paper-filed.

I'm not aware of anything you need to attach and/or to "alert" anyone re what amounts to non-taxable income to NCDOR.

The NR worksheet pretty much speaks for itself. I imagine it might not be a bad idea to have the "proof" in your folder, if needed.

Quite frankly, it would appear the employer, with proper notification (see line 4 of NC Form W-4 ---- http://www.dornc.com/downloads/nc-4.pdf or the instructions http://www.dornc.com/downloads/nc4_instructions.pdf ---- should never have withheld any NC taxes in the first place.

FE

[taxea]

Her Employer's human resource department may know that she is a military wife but, they may not have passed it on to the paperwork department.

[FEDUKE404]

Huh?

Her Employer's human resource department may know that she is a military wife but, they may not have passed it on to the paperwork department.

One would think that an employee's Form NC-4 ("Employee's Withholding Allowance Certificate") --- take a look at it!! --- for payroll withholding might have played a role in things for the "paperwork department"?????

[taxea]

One would think that an employee's Form NC-4 ("Employee's Withholding Allowance Certificate") --- take a look at it!! --- for payroll withholding might have played a role in things for the "paperwork department"?????

Are you asking a question or just making a statement?

[Burke]

Quite frankly, it would appear the employer, with proper notification (see line 4 of NC Form W-4 ---- http://www.dornc.com/downloads/nc-4.pdf or the instructions http://www.dornc.com/downloads/nc4_instructions.pdf ---- should never have withheld any NC taxes in the first place.

FE

You are exactly right and the TP furnished them with the info. They withheld anyway. There were two employers, and one did and one did not. And the one who did not is based in Greensboro! Go figure. We're giving it another shot for 2013.

[FEDUKE404]

Employer withholding issues

You are exactly right and the TP furnished them with the info. They withheld anyway. There were two employers, and one did and one did not. And the one who did not is based in Greensboro! Go figure. We're giving it another shot for 2013.

Does not surprise me in the least, especially for a "smaller" employer. I'm not sure they even acknowledge the military entry on the NC Form W-4 and/or know how to handle it.

Just make do with what you have, and tell your client the rest of the refund will be on the way.

As for your original post, I think if you fill in the correct amount on the NR worksheet ("income subject to NC tax") as zero, your software should handle everything to include efile and refund of all improperly withheld NC tax. It's still basically a Form D-400 with a little extra info.

This all assumes, of course, that neither the H or W was a resident of NC prior to military associations. Then it's an entirely different ballgame. And it will depend upon what their home of record state is, but don't forget the "NC" income is likely to still be taxed by their home state, and the zero withholding of that state....might hurt! (FL TX et al helps...)

FE

[Burke]

This all assumes, of course, that neither the H or W was a resident of NC prior to military associations. Then it's an entirely different ballgame. And it will depend upon what their home of record state is, but don't forget the "NC" income is likely to still be taxed by their home state, and the zero withholding of that state....might hurt! (FL TX et al helps...)
FE

Yes, they both came from Texas. Anyway, I just created the efile for NC and it appeared to work just fine. But there apparently is nothing for the TP to sign for NC? (VA has its own 8879.)

[FEDUKE404]

Filing update

Yes, they both came from Texas. Anyway, I just created the efile for NC and it appeared to work just fine. But there apparently is nothing for the TP to sign for NC? (VA has its own 8879.)

Good choice on their part!

You are correct - NC has no "extra" form for efiling, as does VA. The federal Form 8879 handles all.

Aside: I always have wondered why VA makes things so complicated, with my favorite being for a person with VA 2013 estimated tax payments having to send those payments to different addresses, as well as also having different payees.

FE

[Burke]

Aside: I always have wondered why VA makes things so complicated, with my favorite being for a person with VA 2013 estimated tax payments having to send those payments to different addresses, as well as also having different payees. FE

If you are talking about the local Commissioners of Revenue & the local Treasurers' info, I have never used any of them. I have been doing taxes in VA since the 1970's and everything I ever did went to the same address in Richmond. (For individual returns and estimated taxes ---- corp and fiduciary have a different P. O. Box.) It still works. In the old days before computers, using the locals only delayed everything by a week or more.

[FEDUKE404]

VA estimates

If you are talking about the local Commissioners of Revenue & the local Treasurers' info, I have never used any of them. I have been doing taxes in VA since the 1970's and everything I ever did went to the same address in Richmond. (For individual returns and estimated taxes ---- corp and fiduciary have a different P. O. Box.) It still works. In the old days before computers, using the locals only delayed everything by a week or more.

Interesting. I am fully at the mercy of my tax software which says to make the first check payable to "Commissioner of the Revenue" and the other three checks payable to "Treasurer, Your County" with a different (local) mailing address for the two destinations. Also VA payment coupon #1 (due May 1st) has the box checked for "Check here if this is your first payment for this taxable year."

The client lives in a small county in the western part of The Commonwealth, so he apparently "walks" his four payments to the proper destination. All things considered, he may well prefer that approach, especially since he always receives (immediately) a yellow receipt showing the payment.

FE

[Burke]

And that is fine. That works too. But many of my clients didn't want the local offices to see what they make or what their financial positions are (they know them), and besides, for my purposes, there were way, way too many of them in less populated areas of the state -- every city and county has one. It was so much easier to use one place to send everything when we did paper returns. Of course, now that we all efile, it doesn't matter about the return. But I have to override the info on the mailing slips for estimated. When I did paper returns, I gave them the envelope with my label for Richmond. (Still do when that occurs for some reason.)

[Burke]

See page 6 of the NC Form D-400 instructions:

http://www.dornc.com/downloads/D401.pdf

If the spouse is not originally a resident of NC, i.e. from another state accompanying spouse who is on active duty in NC, wages should be exempt from taxation by NCDOR.
If that applies, you should file a NonResident return for NC. Lines 51-53 of Form D-400 will be adjusted accordingly based on your input. That tax return can easily be efiled, one would think.
FE

Thought you might like to know the efile rejected on this return with some crazy note that you had to mark PY or NR on the worksheet but not both. I marked "NR With No NC Taxable Income." If I mark NR only, they owe tax. Looks like we will have to mail in.