eNC3 Penalty and Waiver Information
Electronic Filing Requirement
Employers and other payers who are required to or voluntarily withhold NC income taxes are required to file the following information electronically, using the eNC3 and Information Reporting Application:
- Form NC-3
- W-2 Statements
- 1099 Statements
The NCDOR has multiple filing options to meet the electronic filing requirement. You can use the eNC3 and Information Reporting Application to test files during development. Some individuals and entities, who are not required to file Form NC-3, may be required to report W-2 and 1099 statements to the NCDOR if they pay or control the payment of any income to any taxpayer. For more information, check out our Frequently Asked Questions.
Note: The Secretary of Revenue announced automatic waiver of the penalty for failure to file 2018 and 2019 NC-3 forms in the format prescribed by the Secretary. For purposes of Form NC-3, the format prescribed by the Secretary requires a payer to file one Form NC-3, along with the State’s copy of all required W-2 and 1099 statements, in an electronic format on or before the due date using the NCDOR’s eNC3 and Information Reporting Application. See the Important Notice dated January 11, 2019 and Important Notice dated August 5, 2019.
However, if an employer or a payer does not timely file 2018 or 2019 NC-3 forms either electronically or by paper on or before January 31, the Secretary will impose a failure to timely file penalty against the taxpayer. The failure to file penalty is $50 per day, up to a maximum of $1,000, for failure to file certain informational returns with the Secretary by the date the return is due. Important: For tax year 2018 filings, a request to waive an informational return penalty will not affect the taxpayer’s good compliance record for filing tax returns. However, starting with the filings for tax year 2019, a request to waive an informational return penalty will affect a taxpayer’s good compliance record for filing tax returns.
Due Dates
The following information is due on or before January 31* of the succeeding year:
- Form NC-3
- W-2 Statements
- 1099 Statements
*This due date does not apply if an employer or payer terminates their business or permanently ceases paying taxable NC wages, non-wage compensations, and pension payments. For more information, check out our Frequently Asked Questions.
Penalties
- A taxpayer will be assessed a penalty of $50 per day, up to a maximum of $1,000, for failure to file the informational return by the date the return is due.
- An individual or entity that is not required to file Form NC-3 is not subject to the informational return penalty.
Waiver Information
Who should request a waiver?
Taxpayers who are unable to file Form NC-3 by the due date.
Note: Taxpayers who are unable to meet the electronic filing requirement for tax years 2018 and 2019 were granted an automatic penalty waiver. The waiver is an automatic waiver – no action is required. See the Important Notice dated January 11, 2019 and Important Notice dated August 5, 2019.
How to request a waiver?
A taxpayer may request a waiver of an informational return penalty by submitting Form NC-5501, Request for Waiver of an Informational Return Penalty.
Paper Filers
Paper filers can submit the waiver request with their paper return, or upon receiving a notice.
Electronic Filers
Electronic filers can submit the waiver upon receiving a notice.