Is Nc behind on refunds?

[erchess]

Client who is also friend was accepted on 3/4. He owed Federal but was due over 1.5K from State due to the fact that most of family income is for one reason or another not taxed in NC and yet withholding was as if it were all taxable to NC. All the NC Where's My Refund website will tell us is that it is being processed. Is there any way to get more info on what is going on or when he might expect his refund? Is NC running behind making refunds due to shortage of funds or something?

[FEDUKE404]

Not a considerable delay for NCDOR

I assume you filed either part-year or non-resident for NC ?? And, if so, filled out/submitted the appropriate worksheets for federal income versus NC income ??

Even for a full-time NC resident, it is probably wishful thinking to expect a refund by now for something efiled (?) on March 4th. While it is not uncommon for NC refunds (did you do direct deposit?) to occur within a couple of weeks, it is unlikely. (Sorry, I get limited feedback from clients and, quite frankly, don't routinely track any refunds barring an obvious substantial delay.)

Remember NC is notorious for lessening refunds due to any numbers of reasons, to include unpaid taxes and/or college loans. I think even parking tickets and unpaid child support can now be included.

You can always call NCDOR, but expect to wait a V-E-R-Y long time, and then you may not even be able to get the information you need. The last time I tried to call about nothing more complicated than on what date a client's estimated payment was received, or even ("yes" or "no") IF it was received, I wrote them off for obtaining any assistance. Unless you are lucky enough to get high up the food chain, you likely can get far better and reliable information from a Ouija board.

BTW: If the income was not from NC, why was any NC withholding occurring in the first place?? W2 or 1099R ??

FE

[snowshine]

I have a couple of clients who filed in early feb that havn't got their refunds (direct deposit) as yet. I keep telling them not to expect anything before april 15th or so. At least it keeps them quiet for a while.

[erchess]

Bailey

Feduke the reason the income is not taxable to NC is the Bailey Decision. Clients are full time residents of NC. However we went for direct deposit and the message on the Website now says that the check is going to be mailed. If the money is not received by a week from today the client will lack the funds to make his mortgage payment for March and will have to borrow money from somewhere for a trip the wife wants to take to visit her son who is sick our of state. I don't understand why a couple that makes a hundred k a year finds money so tight but oh well.

[FEDUKE404]

Dealing with Bailey/Emory

Feduke the reason the income is not taxable to NC is the Bailey Decision. Clients are full time residents of NC. However we went for direct deposit and the message on the Website now says that the check is going to be mailed. If the money is not received by a week from today the client will lack the funds to make his mortgage payment for March and will have to borrow money from somewhere for a trip the wife wants to take to visit her son who is sick our of state. I don't understand why a couple that makes a hundred k a year finds money so tight but oh well.

I have not run into anyone (and most of my clients file NC) whose NC refund was NOT direct-deposited *if* the proper bank info was provided at time of efiling. OTOH, I have had clients who would provide their "account number" from their bank statement, but the real number would be missing leading digits or something and the refund would automatically bounce. That's why I always say "Show me a CHECK....and definitely NOT a deposit slip!"

There's got to be something amiss somewhere.

As for the Bailey decision, if the **NC** Form 1099-R does not have the magic words "NC VESTED AS OF 8/12/1989" shown, it is highly likely that income is not covered by Bailey. Along a similar line, a recipient has to make a conscious, active decision to have ANY NC withholding occur (aka override) from a Bailey-covered retirement. The State of NC, 401(k) plan, and Deferred Comp plan all routinely take out zilch NC withholding from people identified on the Form 1099-R as Bailey eligible.

It is possible for a NC resident to have some NC "retirement" income Bailey covered, and other not covered. The classic, and not that unusual, is a case where the retirement income (from work) is not Bailey but the other retirement income (such as a rollover) can be Bailey. And, of course, Bailey cannot be used for ANY income (other than military/civil service) that originates in another state. A NY retiree who later moves to NC cannot use Bailey in any way/shape/form to cover his NY retirement income. He is stuck with the $2k max private retirement or $4k max "government" retirement exclusion.

As for the case you posted, I am curious as to what "went wrong." It does not really pass the smell test, absent a clerical error somewhere along the way.

FE