What's New for Tax Year 2022? Unless otherwise noted, the following information applies to individuals for tax year 2022. For information about another tax year, please review the Department’s Instructions and Bulletins for that year. N.C. Tax Rate North Carolina law was amended to decrease the individual income tax rate to 4.99% for tax year 2022. N.C. Child Deduction North Carolina law was amended to increase the child deduction for tax year 2022. (For more information, see page 13 of Form D-401, North Carolina Individual Income Tax Instructions). North Carolina Net Operating Loss North Carolina law was amended to decouple from federal net operating loss provisions in order to allow for a separate N.C. net operating loss. If your business deductions for tax year 2022 are more than your gross income for tax year 2022, you may have a N.C. net operating loss. (To compute your N.C. net operating loss for tax year 2022, use Form NC-NOL). Taxed Pass-through Entities North Carolina law was amended to include a provision that allows certain pass-through entities ("PTEs") to elect to pay North Carolina income tax at the entity level (a "Taxed PTE"). If you are a partner or a shareholder in a Taxed PTE for tax year 2022, you should review the instructions for Form D-400 Schedule S to determine if a N.C. adjustment is needed to account for your share of North Carolina income (loss) from the Taxed PTE. (For more information, see Page 18 of Form D-401, North Carolina Individual Income Tax Instructions). N.C. Standard Deduction North Carolina law was amended to increase the standard deduction amount for tax year 2022. (For more information, see Page 14 of Form D-401, North Carolina Individual Income Tax Instructions). Failure to Pay Penalty For assessments dated on or after January 1, 2023, the failure to pay penalty is reduced to 5% of net tax due, regardless of how late the tax is paid. (For more information, see Page 9 of Form D-401, North Carolina Individual Income Tax Instructions). Certain Retirement Benefits Received by a Retired Member of the United States Uniformed Services North Carolina law was amended to allow eligible members of the United States Uniformed Services to deduct military retirement payments received from the United States government. (For more information, see Page 18 of Form D-401, North Carolina Individual Income Tax Instructions). Other 2022 Legislative Changes For information on other legislative changes that affect tax year 2022, see the "2022 Tax Law Changes" publication available on the Department's website. Related Content North Carolina Individual Income Tax Instructions
What's New for Tax Year 2022? Unless otherwise noted, the following information applies to individuals for tax year 2022. For information about another tax year, please review the Department’s Instructions and Bulletins for that year. N.C. Tax Rate North Carolina law was amended to decrease the individual income tax rate to 4.99% for tax year 2022. N.C. Child Deduction North Carolina law was amended to increase the child deduction for tax year 2022. (For more information, see page 13 of Form D-401, North Carolina Individual Income Tax Instructions). North Carolina Net Operating Loss North Carolina law was amended to decouple from federal net operating loss provisions in order to allow for a separate N.C. net operating loss. If your business deductions for tax year 2022 are more than your gross income for tax year 2022, you may have a N.C. net operating loss. (To compute your N.C. net operating loss for tax year 2022, use Form NC-NOL). Taxed Pass-through Entities North Carolina law was amended to include a provision that allows certain pass-through entities ("PTEs") to elect to pay North Carolina income tax at the entity level (a "Taxed PTE"). If you are a partner or a shareholder in a Taxed PTE for tax year 2022, you should review the instructions for Form D-400 Schedule S to determine if a N.C. adjustment is needed to account for your share of North Carolina income (loss) from the Taxed PTE. (For more information, see Page 18 of Form D-401, North Carolina Individual Income Tax Instructions). N.C. Standard Deduction North Carolina law was amended to increase the standard deduction amount for tax year 2022. (For more information, see Page 14 of Form D-401, North Carolina Individual Income Tax Instructions). Failure to Pay Penalty For assessments dated on or after January 1, 2023, the failure to pay penalty is reduced to 5% of net tax due, regardless of how late the tax is paid. (For more information, see Page 9 of Form D-401, North Carolina Individual Income Tax Instructions). Certain Retirement Benefits Received by a Retired Member of the United States Uniformed Services North Carolina law was amended to allow eligible members of the United States Uniformed Services to deduct military retirement payments received from the United States government. (For more information, see Page 18 of Form D-401, North Carolina Individual Income Tax Instructions). Other 2022 Legislative Changes For information on other legislative changes that affect tax year 2022, see the "2022 Tax Law Changes" publication available on the Department's website. Related Content North Carolina Individual Income Tax Instructions
