Filing Requirements
NOTICE: The information included on this website is to be used only as a guide in the preparation of a North Carolina corporate income and franchise tax return. It is not intended to cover all provisions of the law or every taxpayer's specific circumstances.
Corporations Required to File
Unless specifically exempt under G.S. 105-125, all active and inactive domestic corporations, and all foreign corporations with a Certificate of Authority to do business, or which are in fact doing business in this state, are subject to the annual franchise tax levied under G.S. 105-122.
If an LLC is treated as a C Corporation for federal tax purposes and a corporate member’s only connection to North Carolina is its ownership interest in the LLC, the corporate member(s) is not required to file a North Carolina corporate income and franchise tax return. The corporate member(s) is not required to file in this circumstance because the LLC reports its North Carolina income at the entity level and the apportionment attributes of the LLC do not flow through to the corporate member(s) as is the case when the LLC is disregarded or is treated as a partnership.
If an LLC is treated as a C Corporation for federal tax purposes and a corporate member has activities in this state in addition to its ownership interest in the LLC, the corporate member(s) is required to file a corporate income and franchise tax return.
Domestic and Foreign Corporations Required to File
All domestic corporations (those chartered in North Carolina) and all foreign corporations which are doing business in North Carolina and every inactive corporation chartered or domesticated here must file an annual franchise and income tax return using the name reflected on the corporate charter if incorporated in this state, or on the certificate of authority if incorporated outside this state. A franchise tax is imposed on corporations for the privilege of doing business in this state even though the activities are exempt from income tax under P.L. 86-272. For a corporation that is subject to both income tax and franchise tax, its apportionment factor is the same for both taxes. For a corporation that is subject to franchise tax but not income tax, its apportionment factor for computing the amount of franchise tax due is the same factor that would be used if its activities that are protected by P.L. 86-272 were subject to income tax in this state.
Corporate franchise and income tax returns are due on the 15th day of the fourth month following the close of the income year. An income year ending on any day other than the last day of the month is deemed to end on the last day of the calendar month ending nearest to the last day of the actual income year. Income tax returns for cooperative or mutual associations are due on or before the 15th day of the ninth month following the close of the income year; however, these corporations, if subject to franchise tax, must file a franchise tax return by the 15th day of the fourth month following the close of the income year.
An extension of time may be granted to file the corporate franchise and income tax return.
Non U.S./Foreign
Certain foreign corporations, other than those having an office or place of business in the United States or a FSC or former FSC, are required to file their federal income tax returns by the 15th day of the seventh month instead of by the 15th day of the fourth month. North Carolina law permits these corporations to file Form CD-405 on the 15th day of the seventh month instead of by the 15th day of the fourth month.
Tax Exempt
Certain corporations organized under Chapter 55A are exempt from franchise tax and income tax under G.S. 105-125 and 105-130.11, respectively. However, these corporations are not exempt on "unrelated business income" earned in excess of $1000 annually. The term "unrelated business income" is the same as defined under the Internal Revenue Code. Income tax returns for nonprofit entities that are tax exempt are due on or before the 15th day of the fifth month following the close of the tax year.
North Carolina Political Organizations
In general, a NC political organization must file Form CD-405 by the 15th day of the fourth month following the close of the income year. Interest and applicable penalties may be imposed if the organization is required to file Form CD-405 and fails to file the form by the due date.
In general, effective for taxable years beginning on or after January 1, 2018, corporations engaged in multistate business activity, except for those subject to special apportionment, are required to apportion to this state all apportionable income using only the sales factor.
For information on determining the apportionment factor for tax years prior to January 1, 2018, please see the applicable prior tax year's Corporate Tax Technical Bulletin.
For more information, see G.S. 105-130.4.
C-Corporations that expect to have an income tax liability to this state of $500 or more are required to file Form CD-429, Corporate Estimated Income Tax, and pay estimated income tax. The term "estimated tax" means the amount of income tax the corporation expects to owe for the taxable year after subtracting any tax credits. The term "taxable year," for the purpose of filing declarations of estimated tax, means the calendar or fiscal year in which the company expects to earn the income upon which the estimated tax is based.
Form CD-429, Corporate Estimated Income Tax, is used to pay corporate estimated income tax. Payments of tax are due to be filed on or before the 15th day of the 4th, 6th, 9th and 12th months of the taxable year. Failure to pay the required amount of estimated income tax will subject the corporation to interest on the underpayment. (Use Form CD-429B to calculate the interest).
Pay Estimated Income Tax Online
Note: Taxed S Corporations are required to make estimated tax payments in the same manner as C-Corporations, but will use Form CD-429 PTE. For more information regarding Taxed S Corporations, see the section on Taxed Pass-Through Entities in the 2023 Personal Taxes Bulletin.
NC Gen. Stat. § 105-241.6(b)(5) provides an exception to the general statute of limitations for obtaining a refund of an overpayment due to a contingent event. The statute addresses two types of contingent events whereby the general statute of limitations for refunds may be extended once:
- Litigation or State Tax Audits, and
- Other Events
Litigation or State Tax Audits
Statutory Requirements (NC Gen. Stat. § 105-241.6(b)(5)(a))
If a taxpayer is subject to litigation or a state tax audit that prevents the taxpayer from filing an accurate and definite request for a refund of an overpayment within the period under NC Gen. Stat. § 105-241.6, the period to request a refund of an overpayment is six months after the litigation or state tax audit concludes.
The taxpayer must file written notice to the Secretary prior to expiration of the statute of limitations under NC Gen. Stat. § 105-241.6. The notice must identify and describe the litigation or state tax audit, identify the type of tax, list the return or payment affected, and state in clear terms the basis for and an estimated amount of the overpayment.
Requesting a Contingent Event Exception Due to Litigation or State Tax Audit
To provide written notice to the Secretary, you should Complete Parts 1 and 2 of Form NC-14, Notice of Contingent Event or Request to Extend Statute of Limitations. In lieu of completing Form NC-14, you may mail a letter containing all of the required information identified on Form NC-14. Form NC-14, or a letter sent in lieu of Form NC-14, will not be accepted if it does not include all of the required information or is not filed prior to the expiration of the statute of limitations.
The Department will notify you in writing that either (1) the contingent event notice has been received with all required information or (2) the contingent event notice has been received without all required information.
A request for a refund of an overpayment must be filed within six months after the contingent event concludes. Include a copy of the Department’s acknowledgment of an accepted notice.
Other Events
Statutory Requirements (NC Gen. Stat. § 105-241.6(b)(5)(b))
If a taxpayer contends that an event, other than litigation or a state tax audit, has occurred that prevents the taxpayer from filing an accurate and definite request for a refund of an overpayment within the period under NC Gen. Stat. § 105-241.6, the taxpayer may submit a written request to the Secretary seeking an extension of the statute of limitations. The taxpayer must file a written request to the Secretary prior to expiration of the statute of limitations under NC Gen. Stat. § 105-241.6.
The request must establish by clear, convincing proof that the event is beyond the taxpayer's control and prevents the taxpayer from timely filing an accurate and definite request for a refund of an overpayment. The Secretary's decision on the request is final and is not subject to administrative or judicial review. If the Secretary agrees to the request, the period to file a request for a refund of an overpayment is six months after the event concludes.
Requesting a Contingent Event Exception Due to an Event Other than Litigation or a State Tax Audit
To provide written notice to the Secretary, you should complete Parts 1 and 3 of Form NC-14, Notice of Contingent Event or Request to Extend Statute of Limitations. In lieu of completing Form NC-14, you may mail a letter containing all of the required information identified on Form NC-14. Form NC-14, or a letter sent in lieu of Form NC-14, will not be accepted as a request for an extension if it does not include all required information or is not filed prior to the expiration of the statute of limitations.
The Department will respond in writing as to whether the request for an extension of the statute of limitations is granted or declined by the Secretary of Revenue. The Secretary of Revenue’s decision to grant or decline the request is final and is not subject to administrative or judicial review.
If the extension of the statute of limitations is granted, the request for a refund of an overpayment must be filed within six months after the event or condition concludes. Include a copy of the Department’s grant of the request for an extension of the statute of limitations with the request for a refund of an overpayment.
Where to Mail Form NC-14, Notice of Contingent Event or Request to Extend Statute of Limitations
Mail Form NC-14, Notice of Contingent Event or Request to Extend Statute of Limitations, or a letter in lieu of Form NC-14, to P.O. Box 871, Raleigh, North Carolina 27602-0871. Address the envelope to the attention of the taxing division for the tax to which the event or condition applies. For example:
Corporate Tax Division
Personal Taxes Division
Sales and Use Tax Division
Excise Tax Division