Announcement

Collapse
No announcement yet.

NC help?

Collapse
X
Collapse
 
  • Page of 1
  • Filter
  • Time
  • Show
Clear All
new posts
Previous template Next
    #1

    NC help?

    Would someone please enlighten me regarding the NC state return?

    I have a client who just moved to NC and I'm wondering if the "adjustment for net business income that is not considered passive" is correct.

    Does this really mean that NONE of her self employment income is taxable? Taxwise is taking the entire amount out of the income. I looked it up in TTB NC-4, pp2, and there it is.

    If this is true, I'm packing my bags. I'm outta VA.
    "I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur Godfrey
    Tags: None
    #2
    Answer

    More or less, kinda. (You do have to read the fine print.)

    Of course, that exclusion would theoretically be only on the NC income part....careful on those worksheets.

    You may wish to read this NCDOR document:
    Page Not Found | NCDOR
    http://www.dornc.com/practitioner/individual/directives/pd-12-2.pdf


    Oh yes....that tax break is no longer available as of 01/01/2014. Guess you can consider continuing to reside in the Commonwealth ??

    FE

    Comment

      #3
      Pretty here

      Well, it is pretty here in VA. But if it really was available, I sure would re-lo!

      Taxwise is the worst for state tax returns. I swear, I need to change software. I have so much military that it really demands better state software. There is an adjustment for military pensions that I had to look for on the advise of MY CLIENT. Not good.

      I bet I spend at least 30 hours trying to get the different states correct.

      Thanks for your help.
      "I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur Godfrey

      Comment

        #4
        Yes, is correct that NC non passive income is deductible up to those income limits listed in the instructions for line 50 of NCDOR instructions. However, that will no longer be the case for 2014 income, so client should prepare. Several NC deductions will no longer exist for 2014 as they are trying to go to a flat tax of 5.8%.

        Comment

          #5
          More on NC retirement

          Originally posted by Possi View Post
          Well, it is pretty here in VA. But if it really was available, I sure would re-lo!

          Taxwise is the worst for state tax returns. I swear, I need to change software. I have so much military that it really demands better state software. There is an adjustment for military pensions that I had to look for on the advise of MY CLIENT. Not good.

          I bet I spend at least 30 hours trying to get the different states correct.

          Thanks for your help.
          Assuming you are talking about NC taxation of military retirement: There are currently two groups for such. Bailey (full) exclusion and "government" (max of $4k) exclusion. Merely being "military" or "government" may not be all of the information you need to prepare a 2013 NC return correctly.

          And for another FWIW: Starting in 2014, there will be no "retirement" exclusions in NC except for those which meet the requirements to exclude ALL retirement that specifically meets the Bailey exclusion.

          FE

          Comment

            #6
            Sooooo....

            What do you do with military DFAS retirement? It appears to fall under Bailey, but now I'm doubting my own judgment.

            I looked online for line-by-line instructions to no avail. TTB All States doesn't give enough detail.

            Is NC going to start taxing all retirement after 2014? I am sure that is the only reason these people moved there. They work in VA, and always will.
            "I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur Godfrey

            Comment

              #7
              More on NC retirement exclusions

              Originally posted by Possi View Post
              What do you do with military DFAS retirement? It appears to fall under Bailey, but now I'm doubting my own judgment.

              I looked online for line-by-line instructions to no avail. TTB All States doesn't give enough detail.

              Is NC going to start taxing all retirement after 2014? I am sure that is the only reason these people moved there. They work in VA, and always will.
              Whether something qualifies for Bailey is pretty much a "when" question and not always a "what" question.

              To perhaps answer your question: Bailey exclusions apply to many things, but primarily State of NC retirement payments (to include 401k stuff), military retirement, and government (civil service) retirement. But there are strong rules in place for how long / when the person was working to earn the full exclusion. If the time frames are met, for all of the above, a full Bailey exclusion. If the time frames are NOT met, then only a maximum (all sources) of $4k exclusion. As stated previously, the $4k exclusion (and $2k exclusion for "private" retirement) goes away after 2013.

              It is worth noting that non-federal retirement from another state (such as a NY retiree who moves to NC) can **NEVER** be excluded under the Bailey ruling. Some people do not understand that rule. . .

              THE RULES: As a result of Bailey and Davis, any Federal, military, or **NC** state or local government retiree, or beneficiary of such a retiree, who is receiving retirement benefits from the corresponding government plan, and who had at least five years of credited service as of August 12, 1989, is exempt from North Carolina state tax on those retirement benefits.

              FE

              Comment

                #8
                Wow~

                What a help. Thanks for the information.
                "I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur Godfrey

                Comment

                  #9
                  Thanks, SuperMom

                  thanks for the head's up on the new rules, too!
                  "I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur Godfrey

                  Comment

                  Previous template Next

                  Disclaimer

                  Collapse

                  This message board allows participants to freely exchange ideas and opinions on areas concerning taxes. The comments posted are the opinions of participants and not that of Tax Materials, Inc. We make no claim as to the accuracy of the information and will not be held liable for any damages caused by using such information. Tax Materials, Inc. reserves the right to delete or modify inappropriate postings.

                  Working...
                  X