During the 2017 session, the North Carolina General Assembly enacted Session Law 2017-57 which converted North Carolina’s child tax credit to a child deduction. The new “Child Deduction Amount” varies based on a taxpayer’s filing status and adjusted gross income (“AGI”). The “Child Deduction Amount” expands the number of taxpayers who may benefit by increasing the AGI limits and by providing five deduction amounts, as opposed to the current two credit amounts.
The conversion of the child tax credit to a child deduction required adjustments to the the allowance worksheets for Form NC-4. Employers are not required to obtain a new NC-4 form from each employee because of the conversion of the child tax credit to a child deduction; however, be aware that an employee could either be entitled to an additional allowance or lose an existing allowance because of this law change. We encourage you to review the number of allowances that you claimed in 2017 to determine if the number should be adjusted. If you have any questions, please speak to your tax advisor.
Your current number of allowances can be found on the top right hand corner of your check stub located in the timekeeper portal. If you wish to make a change in the number of allowances that you are claiming, a copy of the new NC-4 Withholding form can be found on the Finance Department web page for you to complete and return to payroll.
YOU ONLY NEED TO COMPLETE AND RETURN A NEW NC-4 FORM TO PAYROLL IF YOU WANT TO MAKE A CHANGE!