Deductions

All employees should fill-out a W-4 form and NC-4 form for federal and state withholding taxes. These are available in the Human Resources Department and in the Payroll Office in Phillips Hall. If no W-4/NC-4 is on hand in time for payroll processing, then the required assumption is that the employee is single with no exemptions.

Employees must file an amended Form W-4 and NC-4 if their filing status, exemption allowances or exempt status has changed since the last filing of their withholding forms.

While the staff in the Payroll Office can assist you with identifying all the required boxes on the W-4 and NC-4 forms, they cannot give you tax advice.  Please consult with a professional tax advisor regarding your particular tax situation.  You may also consult Federal Publication 505 for information on Federal Tax Withholding as well as the IRS Online Withholding Tax Calculator.

Here are some sample W-4 and NC-4EZ forms along with instructions to show you the correct way to fill them out.

If you claim “exempt” on either your Federal or State Withholding forms, no withholding taxes will be deducted from your pay.

You can claim exemption from Federal withholding if both of the following situations apply to you:

• For the previous calendar year you had a right to a refund of all federal income tax withheld because you had no tax liability, and
• This year you expect a refund of all federal income tax withheld because you expect to have no tax liability

Please consult the IRS chart for exemption from withholding on Form W-4.

You can claim exemption from State withholding if you meet both of the following conditions:

• For the previous calendar year you were entitled to a refund of all state income tax withheld because you had no tax liability, and
• This year you expect a refund of all state income tax withheld because you expect to have no tax liability

Additionally, you can claim exemption from State withholding if you can certify that you are exempt from North Carolina withholding because you meet the requirements of the Military Spouses Residency Relief Act.

Employees claiming “exempt” from withholding on their Forms W-4 and/or NC-4 must complete new forms each year by February 15th in order to keep their exempt status. Employees that do not submit new forms by the deadline will be processed as single with zero withholding allowances.

Certain deductions are not subject to Federal and State Withholding taxes.  Retirement contributions (TSERS and ORP), medical insurance deductions, NC Flex deductions, university parking fees, and supplemental retirement deductions (401k, 403b, 457 Plans) are tax deferred (not subject to federal or state withholding).

Certain deductions are not subject to FICA and Medicare taxes. Medical insurance deductions, NC Flex deductions, and University parking fees are not subject to FICA and Medicare taxes.