eNC3 Frequently Asked Questions Updates for Tax Year 2020 Filing Requirements Filing Options Filing Scenarios Due Date Filing Errors Informational Return Penalties Updates For Tax Year 2020 Until further notice, the Secretary of Revenue will continue the automatic waiver of the penalty for failure to file Form NC-3 in the format prescribed by the Secretary. Federal Form 1099-NEC is required to be filed with the Department if the statements report North Carolina income tax withholding. The Department will retire North Carolina Form NC-1099-ITIN and Form NC-1099PS. Payers can now report compensation paid to a payee on new tax form, North Carolina Form NC-1099M, Compensation Paid to a Payee. For additional details, see Important Notice dated October 2, 2020. Filing Requirements Am I required to file Form NC-3? You must file Form NC-3 if you are required to withhold or you voluntarily withheld North Carolina income taxes. What do I need to file Form NC-3? You will need a North Carolina withholding account ID number (“NC Withholding ID Number”). To get a NC Withholding ID Number you can register online to receive your withholding number immediately, or file Form NC-BR. If you send in a paper registration, you should receive your withholding number within four weeks. Which forms and statements am I required to file with the Departments as part of Form NC-3 filing requirement? Form Required to file if NC withholding reported? Required to file if no NC withholding reported? W-2 Yes Yes, if issued to NC resident or issued to non-resident for services performed in NC W-2G Yes No, if reported to the IRS 1099-MISC Yes No 1099-NEC Yes No 1099-R Yes Yes, if recipient's address is located in North Carolina 1099-B Yes No, if reported to the IRS 1099-DIV Yes No, if reported to the IRS 1099-INT Yes No, if reported to the IRS 1099-OID Yes No, if reported to the IRS 1099-G Yes No, if reported to the IRS 1042-S Yes Yes, if it includes North Carolina source income NC-1099M Yes No, if reported to the IRS on federal Form 1099-NEC or Form 1099-MISC If I am not required to file Form NC-3, am I still required to file a copy of Form W-2 and various 1099 statements with the Department? If you are not required to file Form NC-3 you may still have a requirement to file certain information returns with the Department. If you directly or indirectly pay or control the payment of any income to any taxpayer in North Carolina, then you are required to file certain W-2 and 1099 statements with the Department. For a detailed list of statements required to be filed with the Department view this table. Note: The information reporting requirements generally apply to payments made in the course of your trade or business; therefore, if you pay an independent contractor to make improvements to your personal residence, you are not required to file an information return with the Department to report the payment of this income to the independent contractor. However, payments made to an employee, even if they are not in the course of your trade or business, are reportable to the Department. For example, if you are required to file a Form W-2 with the IRS for a household employee, you must also file a copy of the Form W-2 with the Department if the Form W-2 was issued to a resident of North Carolina or to a non-resident for services performed in North Carolina. For more information, reference general statute G.S. 105-154(b). Can I use the IRS Combined Federal/State Filing Program (CF/SF) to report the required W-2 and 1099 statements, which do not include North Carolina withholding, to the IRS instead of filing these forms directly with the Department? No. The required W-2 and 1099 statements must be filed directly with the Department. For additional details, see this FAQ if you are required to file Form NC-3 and this FAQ if you are not required to file Form NC-3. Filing Options What types of forms or statements can I file using the eNC3 and Information Reporting Application? You can file forms NC-3 and NC-3X, along with W-2, W-2c, 1099, and 1042-S statements electronically via the eNC3 and Information Reporting Application. This includes corrected 1099s. If I do not have a North Carolina withholding account identification number, can I electronically file Form NC-3 using an “applied for” status? No. You cannot electronically file Form NC -3 using an "applied for" status. If you have applied for but have not received a North Carolina withholding account identification number, please contact the Department for assistance at 877-252-3052. If I am not required to file Form NC-3 but I am still required to file a copy of certain W-2 and 1099 statements with the Department, how do I file the required W-2 and 1099 statements with the Department? You can electronically file W-2 and 1099 statements with the Department through the eNC3 and Information Reporting application. The application can be used to upload files, manually enter information, or a combination of both. Alternatively, you can file W-2 and 1099 statements on paper. If you choose to file the required statements on paper, you should mail the statements to North Carolina Department of Revenue, PO Box 25000, Raleigh, North Carolina 27640-0001. Note: Do not include a Form NC-3 or any other cover page with the mailed documents. Is a North Carolina withholding account identification number required if I am only filing W-2 or 1099 statements that do not report North Carolina withholding? No. If you are filing W-2 or 1099 statements that do not report North Carolina withholdings, a NC withholding account identification number is not required. Filing Scenarios for Form NC-3 and the Required W-2 and 1099 Statements If filing electronically via the eNC3 and Information Reporting Application, am I required to file Form NC-3 and the required W-2 and 1099 statements simultaneously in one submission? No. You can submit Form NC-3 and the required W-2 and 1099 statements separately so long as both submissions are submitted to the Department on or before the due date for Form NC-3. Do NC-3 forms and W-2 statements have to be filed the same way? For example, could I file NC-3 forms using manual entry and file W-2 statements using Web File Upload? No, NC-3 forms and W-2 statements do not have to be filed the same way. The eNC3 and Information Reporting Application allows for flexibility and you can file NC-3s W-2s and 1099s using web file upload, manual entry, or a combination of both. Can I submit separate NC-3s for my 1099 and W2 withholding information if I report withholding for both under one Account ID? No. You should submit one NC-3 with all of the required W-2 and 1099 statements. See the next FAQ if a payroll provider files your W-2 information. If the agreement with my payroll provider requires them to file Form NC-3 with only W-2 information, do I need to submit a separate Form NC-3 when I file my 1099-NEC information? Yes, if 1099-NEC statements report NC withholding. If you are able to obtain the W-2 withholding information prior to the due date, submit a Form NC-3 with the 1099 and W-2 withholding information. Otherwise, submit a Form NC-3 with only the 1099 withholding information. I have electronically filed Form NC-3 and W-2 statements via the eNC3 and Information Reporting Application; however, I am unable to electronically file the required 1099 statements with Department. How should I file the 1099 statements with the Department? If you are unable to file the required 1099 statements electronically you should mail the statements to North Carolina Department of Revenue, PO Box 25000, Raleigh, North Carolina 27640-0001 by the due date for Form NC-3. Since you have previously electronically filed Form NC-3, do not include a copy of Form NC-3 or any other cover page with the mailed documents. Can I submit Form NC-3X and the required W-2c and corrected 1099 statements electronically via the eNC3 and Information Reporting Application? Yes. To file these forms, select New Amended Submission in the eNC3 and Information Reporting Application. If you are using manual entry, make sure you select the "corrected" form in the drop down box and then check "Voided." Due Date What is the due date for filing Form NC-3 and the required W-2 and 1099 statements? The due date for filing Form NC-3 and the required W-2 and 1099 statements is January 31 of the following calendar year. These forms should be filed electronically using the eNC3 and Information Reporting Application. If you terminate your business, Form NC-3 and the required W-2 and 1099 statements must be filed within 30 days of the date on which you closed your business. Important: If you terminate your business and all required W-2 and 1099 statements are not available to you at the time Form NC-3 is due to be filed, you should file Form NC-3 and the required W-2 and 1099 statements available to you by the due date and you must file the additional required W-2 and 1099 statements when they become available, but no later than January 31 of the following year. Filing Errors How should I submit files that were rejected because of an error? You can test files prior to submission in the eNC3 and Information Reporting Application. If you receive an error, attempt to correct the file and retest. If the error cannot be corrected, file Form NC-3 and required W-2 and 1099 statements in paper form on or before the due date of Form NC-3. Why am I receiving an error stating "Invalid Entry" when I enter my Account ID? Check to make sure you are entering a NC withholding ID number; this is the number you received when you registered for withholding tax with the Department. You can confirm the validity of your NC withholding number by calling 877-252-3052. Note: If you registered for a new NC withholding number in December 2019, you may not be eligible to submit Form NC-3 and the required W-2 and 1099 statements using the eNC3 and Information Reporting Application. In this case, a paper Form NC-3 must be filed with the Department on or before the due date. Be sure to attach all required W-2 and 1099 statements to Form NC-3. Informational Return Penalties Will I be charged a penalty for not filing by the due date? Yes. If you do not file by the due date, you will be subject to a penalty of fifty dollars ($50) per day up to a maximum penalty of one thousand dollars ($1,000). For more information, reference general statute: G.S. 105-236(b)(10)(c). Will I be charged a penalty if I am unable to file Form NC-3 and the required statements electronically via the eNC3 and Information Reporting Application? No. Until further notice, the Secretary of Revenue will continue the automatic waiver of the penalty for failure to file Form NC-3 in the format prescribed by the Secretary. For additional details, see Important Notice dated October 2, 2020. If I am not required to file Form NC-3 but I am still required to file a copy of certain W-2 and 1099 statements with the Department, am I subject to the informational return penalties? No. Taxpayers that are not required to file Form NC-3 but are required to file certain W-2 and 1099 statements are not subject to the informational return penalties found in G.S. 105-236(b)(10)(c). How do I request a waiver of an informational return penalty? You can request a waiver of a failure to timely file an informational return penalty in the following ways: By submitting Form NC-5501. Form NC-3 and the required W-2 and 1099 statements are collectively considered “Form NC-3” If you file Form NC-5501 prior to receiving a notice of assessment from the Department, you do not need to enter the “Amount of Penalty” or the “Notice Number” in Part 3 of the form. By calling 1-877-252-3052 By writing a letter Note: The Department will notify the taxpayer of its decision to either grant or deny said request. The penalty waiver request for failure to file an informational return timely will affect the taxpayer’s good compliance record. I originally submitted Form NC-3 and the required W-2 and 1099 statements timely via mail, but I received a letter from the Department instructing me to resubmit Form NC-3, W-2, or 1099 statements because all required information was not completed on the form or statements. I resubmitted a completed copy of the requested forms or statements to the Department on or before the due date listed in the letter; however, I was assessed a penalty for failure to file an informational return by the date the return is due. Can I request for this penalty to be waived? Yes, you may request a waiver of failure to timely file an informational return penalty by submitting Form NC-5501 and attaching a copy of the Department’s letter requesting you to resubmit Form NC-3, W-2, or 1099 statements. If you did not save a copy of the Department’s letter for your record, select “Other” reason in Part 4. Reason for Waiver and indicate the date on which original forms and statements were submitted to the Department. In addition, state that the required forms and statements were resubmitted as requested by the Department. Note: In this circumstance, a request to waive an informational return penalty will not affect a taxpayer’s good compliance record for filing tax returns.
eNC3 Frequently Asked Questions Updates for Tax Year 2020 Filing Requirements Filing Options Filing Scenarios Due Date Filing Errors Informational Return Penalties Updates For Tax Year 2020 Until further notice, the Secretary of Revenue will continue the automatic waiver of the penalty for failure to file Form NC-3 in the format prescribed by the Secretary. Federal Form 1099-NEC is required to be filed with the Department if the statements report North Carolina income tax withholding. The Department will retire North Carolina Form NC-1099-ITIN and Form NC-1099PS. Payers can now report compensation paid to a payee on new tax form, North Carolina Form NC-1099M, Compensation Paid to a Payee. For additional details, see Important Notice dated October 2, 2020. Filing Requirements Am I required to file Form NC-3? You must file Form NC-3 if you are required to withhold or you voluntarily withheld North Carolina income taxes. What do I need to file Form NC-3? You will need a North Carolina withholding account ID number (“NC Withholding ID Number”). To get a NC Withholding ID Number you can register online to receive your withholding number immediately, or file Form NC-BR. If you send in a paper registration, you should receive your withholding number within four weeks. Which forms and statements am I required to file with the Departments as part of Form NC-3 filing requirement? Form Required to file if NC withholding reported? Required to file if no NC withholding reported? W-2 Yes Yes, if issued to NC resident or issued to non-resident for services performed in NC W-2G Yes No, if reported to the IRS 1099-MISC Yes No 1099-NEC Yes No 1099-R Yes Yes, if recipient's address is located in North Carolina 1099-B Yes No, if reported to the IRS 1099-DIV Yes No, if reported to the IRS 1099-INT Yes No, if reported to the IRS 1099-OID Yes No, if reported to the IRS 1099-G Yes No, if reported to the IRS 1042-S Yes Yes, if it includes North Carolina source income NC-1099M Yes No, if reported to the IRS on federal Form 1099-NEC or Form 1099-MISC If I am not required to file Form NC-3, am I still required to file a copy of Form W-2 and various 1099 statements with the Department? If you are not required to file Form NC-3 you may still have a requirement to file certain information returns with the Department. If you directly or indirectly pay or control the payment of any income to any taxpayer in North Carolina, then you are required to file certain W-2 and 1099 statements with the Department. For a detailed list of statements required to be filed with the Department view this table. Note: The information reporting requirements generally apply to payments made in the course of your trade or business; therefore, if you pay an independent contractor to make improvements to your personal residence, you are not required to file an information return with the Department to report the payment of this income to the independent contractor. However, payments made to an employee, even if they are not in the course of your trade or business, are reportable to the Department. For example, if you are required to file a Form W-2 with the IRS for a household employee, you must also file a copy of the Form W-2 with the Department if the Form W-2 was issued to a resident of North Carolina or to a non-resident for services performed in North Carolina. For more information, reference general statute G.S. 105-154(b). Can I use the IRS Combined Federal/State Filing Program (CF/SF) to report the required W-2 and 1099 statements, which do not include North Carolina withholding, to the IRS instead of filing these forms directly with the Department? No. The required W-2 and 1099 statements must be filed directly with the Department. For additional details, see this FAQ if you are required to file Form NC-3 and this FAQ if you are not required to file Form NC-3. Filing Options What types of forms or statements can I file using the eNC3 and Information Reporting Application? You can file forms NC-3 and NC-3X, along with W-2, W-2c, 1099, and 1042-S statements electronically via the eNC3 and Information Reporting Application. This includes corrected 1099s. If I do not have a North Carolina withholding account identification number, can I electronically file Form NC-3 using an “applied for” status? No. You cannot electronically file Form NC -3 using an "applied for" status. If you have applied for but have not received a North Carolina withholding account identification number, please contact the Department for assistance at 877-252-3052. If I am not required to file Form NC-3 but I am still required to file a copy of certain W-2 and 1099 statements with the Department, how do I file the required W-2 and 1099 statements with the Department? You can electronically file W-2 and 1099 statements with the Department through the eNC3 and Information Reporting application. The application can be used to upload files, manually enter information, or a combination of both. Alternatively, you can file W-2 and 1099 statements on paper. If you choose to file the required statements on paper, you should mail the statements to North Carolina Department of Revenue, PO Box 25000, Raleigh, North Carolina 27640-0001. Note: Do not include a Form NC-3 or any other cover page with the mailed documents. Is a North Carolina withholding account identification number required if I am only filing W-2 or 1099 statements that do not report North Carolina withholding? No. If you are filing W-2 or 1099 statements that do not report North Carolina withholdings, a NC withholding account identification number is not required. Filing Scenarios for Form NC-3 and the Required W-2 and 1099 Statements If filing electronically via the eNC3 and Information Reporting Application, am I required to file Form NC-3 and the required W-2 and 1099 statements simultaneously in one submission? No. You can submit Form NC-3 and the required W-2 and 1099 statements separately so long as both submissions are submitted to the Department on or before the due date for Form NC-3. Do NC-3 forms and W-2 statements have to be filed the same way? For example, could I file NC-3 forms using manual entry and file W-2 statements using Web File Upload? No, NC-3 forms and W-2 statements do not have to be filed the same way. The eNC3 and Information Reporting Application allows for flexibility and you can file NC-3s W-2s and 1099s using web file upload, manual entry, or a combination of both. Can I submit separate NC-3s for my 1099 and W2 withholding information if I report withholding for both under one Account ID? No. You should submit one NC-3 with all of the required W-2 and 1099 statements. See the next FAQ if a payroll provider files your W-2 information. If the agreement with my payroll provider requires them to file Form NC-3 with only W-2 information, do I need to submit a separate Form NC-3 when I file my 1099-NEC information? Yes, if 1099-NEC statements report NC withholding. If you are able to obtain the W-2 withholding information prior to the due date, submit a Form NC-3 with the 1099 and W-2 withholding information. Otherwise, submit a Form NC-3 with only the 1099 withholding information. I have electronically filed Form NC-3 and W-2 statements via the eNC3 and Information Reporting Application; however, I am unable to electronically file the required 1099 statements with Department. How should I file the 1099 statements with the Department? If you are unable to file the required 1099 statements electronically you should mail the statements to North Carolina Department of Revenue, PO Box 25000, Raleigh, North Carolina 27640-0001 by the due date for Form NC-3. Since you have previously electronically filed Form NC-3, do not include a copy of Form NC-3 or any other cover page with the mailed documents. Can I submit Form NC-3X and the required W-2c and corrected 1099 statements electronically via the eNC3 and Information Reporting Application? Yes. To file these forms, select New Amended Submission in the eNC3 and Information Reporting Application. If you are using manual entry, make sure you select the "corrected" form in the drop down box and then check "Voided." Due Date What is the due date for filing Form NC-3 and the required W-2 and 1099 statements? The due date for filing Form NC-3 and the required W-2 and 1099 statements is January 31 of the following calendar year. These forms should be filed electronically using the eNC3 and Information Reporting Application. If you terminate your business, Form NC-3 and the required W-2 and 1099 statements must be filed within 30 days of the date on which you closed your business. Important: If you terminate your business and all required W-2 and 1099 statements are not available to you at the time Form NC-3 is due to be filed, you should file Form NC-3 and the required W-2 and 1099 statements available to you by the due date and you must file the additional required W-2 and 1099 statements when they become available, but no later than January 31 of the following year. Filing Errors How should I submit files that were rejected because of an error? You can test files prior to submission in the eNC3 and Information Reporting Application. If you receive an error, attempt to correct the file and retest. If the error cannot be corrected, file Form NC-3 and required W-2 and 1099 statements in paper form on or before the due date of Form NC-3. Why am I receiving an error stating "Invalid Entry" when I enter my Account ID? Check to make sure you are entering a NC withholding ID number; this is the number you received when you registered for withholding tax with the Department. You can confirm the validity of your NC withholding number by calling 877-252-3052. Note: If you registered for a new NC withholding number in December 2019, you may not be eligible to submit Form NC-3 and the required W-2 and 1099 statements using the eNC3 and Information Reporting Application. In this case, a paper Form NC-3 must be filed with the Department on or before the due date. Be sure to attach all required W-2 and 1099 statements to Form NC-3. Informational Return Penalties Will I be charged a penalty for not filing by the due date? Yes. If you do not file by the due date, you will be subject to a penalty of fifty dollars ($50) per day up to a maximum penalty of one thousand dollars ($1,000). For more information, reference general statute: G.S. 105-236(b)(10)(c). Will I be charged a penalty if I am unable to file Form NC-3 and the required statements electronically via the eNC3 and Information Reporting Application? No. Until further notice, the Secretary of Revenue will continue the automatic waiver of the penalty for failure to file Form NC-3 in the format prescribed by the Secretary. For additional details, see Important Notice dated October 2, 2020. If I am not required to file Form NC-3 but I am still required to file a copy of certain W-2 and 1099 statements with the Department, am I subject to the informational return penalties? No. Taxpayers that are not required to file Form NC-3 but are required to file certain W-2 and 1099 statements are not subject to the informational return penalties found in G.S. 105-236(b)(10)(c). How do I request a waiver of an informational return penalty? You can request a waiver of a failure to timely file an informational return penalty in the following ways: By submitting Form NC-5501. Form NC-3 and the required W-2 and 1099 statements are collectively considered “Form NC-3” If you file Form NC-5501 prior to receiving a notice of assessment from the Department, you do not need to enter the “Amount of Penalty” or the “Notice Number” in Part 3 of the form. By calling 1-877-252-3052 By writing a letter Note: The Department will notify the taxpayer of its decision to either grant or deny said request. The penalty waiver request for failure to file an informational return timely will affect the taxpayer’s good compliance record. I originally submitted Form NC-3 and the required W-2 and 1099 statements timely via mail, but I received a letter from the Department instructing me to resubmit Form NC-3, W-2, or 1099 statements because all required information was not completed on the form or statements. I resubmitted a completed copy of the requested forms or statements to the Department on or before the due date listed in the letter; however, I was assessed a penalty for failure to file an informational return by the date the return is due. Can I request for this penalty to be waived? Yes, you may request a waiver of failure to timely file an informational return penalty by submitting Form NC-5501 and attaching a copy of the Department’s letter requesting you to resubmit Form NC-3, W-2, or 1099 statements. If you did not save a copy of the Department’s letter for your record, select “Other” reason in Part 4. Reason for Waiver and indicate the date on which original forms and statements were submitted to the Department. In addition, state that the required forms and statements were resubmitted as requested by the Department. Note: In this circumstance, a request to waive an informational return penalty will not affect a taxpayer’s good compliance record for filing tax returns.
