North Carolina Withholding Tax Changes for Calendar Year 2014

In late November, Duke University received official notification from the North Carolina Department of Revenue (NCDOR) regarding state tax changes effective January 1, 2014. These changes are a result of a recently enacted House Bill 998.  Highlights of these changes are included below.  Corporate Payroll Services will be communicating this information to all employees on Wednesday, December 11, 2013. In addition, pay statement notifications will be updated for all December pay dates. We wanted to share with you an advance notification so you are aware in the event you receive questions related to this process. Following the email communications on December 11, please communicate this information to employees who do not have routine access to email. 

  • Revised North Carolina tax withholding forms have been introduced.  Forms include the NC-4EZ (pdf) as well as the NC-4 (pdf). 
  • In conjunction with this new law, taxpayers may no longer claim a personal exemption for themselves, their spouse, children or any other qualifying dependents.
  • The new calculations transition from the use of graduated withholding tables to a flat tax calculation of 5.8%.
  • As a result of this change, every employer must have all employees provide new North Carolina withholding data for all payments issued on or after January 1, 2014 or use the automatic default to single and zero. 

In support of this process, Duke University will update automatically all North Carolina withholding allowances for all biweekly (nonexempt) and monthly (exempt) employees to the default of single marital status and zero withholding allowances on December 11, 2013 with an effective date of January 1, 2014.  

  • If employees elect to override these default options, they should submit changes using the Duke@Work portal and select the North Carolina option.
    • Biweekly (nonexempt) employees must submit changes by Friday, December 27 in order to affect the January payments. 
    • Monthly (exempt) employees must submit changes by Friday, January 10 in order to affect the January payment.
    • Non-compensatory recipients must submit changes using the paper form in the links provided above.  These forms must be submitted by Friday, January 10.
  • For instructions on choosing additional withholding allowances, please use the links on the Duke@Work sidebar or the links provided above.
  • If employees would like to project the impact on their 2014 net pay, they can use the Take Home Pay Calculator.
  • If you have questions regarding the number of allowances you can claim, please consult with your tax professional.  Additional information is also available at the NCDOR website.

We appreciate your assistance in our efforts to support the recent NCDOR regulatory changes. As a reminder, Duke University is not authorized to provide tax advice.  If you have specific questions related to the process, please email payroll at duke.edu.