CHARLOTTE, N.C. — This week, North Carolina residents could begin to file their state tax returns. Many will see changes when they file this year, thanks to a new law state lawmakers passed in 2021.
Among the changes, according to the North Carolina Department of Revenue, including a lower corporate tax bracket and a higher deduction for families with children.
Here are the big changes impacting taxpayers, according to NCDR:
- Reduction in individual income tax rates (from 5.25% to 3.99% over six years)
- Exempt certain military retiree income from taxation
- Child tax deduction is now $500 per child
- Expands eligibility for child deduction by increasing the income threshold
- Lowers corporate tax rate
Anthony Edwards with NCDR said the department is working on a one-sheet to provide taxpayers online so they understand the big changes to the code.
"Our paper forms are ready and on our website," Edwards said. "And with those come the instructions that include the tax law changes. So even though we strongly encourage taxpayers to file electronically, they can use that as a resource."
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Because North Carolina lawmakers were three months late in passing the state budget and amending the tax law, workers with NCDR also got a late start in processing all those changes.
"Usually it takes the Department of Revenue around four and a half to five months to prepare with all the tax law changes, with the testing, with all the forms, to be able to open in mid-January," Edwards said. "So when there's a three and a half month delay, the tax season is going to slide. You know, we tried to reel with the timeline in the end as much as we could. However, you know, we can't risk rolling it out early without being thoroughly vetted."
Edwards said taxpayers who file their state taxes now should expect to get their return in April.