NC residents find new withholding form taxing

Lawmakers say the changes simplify the tax code, but it's leaving a lot of taxpayers scratching their heads.

The old NC-4 was a two-page form. The new one is five pages long, and even the EZ version doesn't look all that easy. People who don't provide their employers with a new form will have taxes withheld from their paychecks at the highest level possible – a single taxpayer with no allowances.

"We have established a new call line specifically for the NC-4. it's received about 4,000 calls in the first month," said Trevor Johnson, spokesman for the Department of Revenue.

People can call toll-free 1-877-252-4487 through Feb. 28 to get help from the agency on the NC-4.

One reason the form is more complicated is because the state no longer goes along with some federal deductions, so someone's state taxable income might be higher than their federal figure.

State deductions have seen big changes, too. Lawmakers repealed almost all itemized deductions. Retirement and business income are no longer deductible. There's no more earned income tax credit and no credit for child care or educational expenses.

Sen. Bill Rabon, R-Brunswick, who helped write the new law, calls it more equitable.

"I think a lot of people historically who did their own taxes, particularly those who didn't know too well what the tax code was, didn't take advantage of those different (deductions and credits)," Rabon said.

"As we move forward, we want to make everything as simple as possible. We want to make everything as equal as possible. We want all the taxpayers treated fairly, and hopefully, treated the same," he said.

The changes don't necessarily mean that tax bills will go up next year, Rabon said, because lawmakers also doubled the standard state deduction and lowered the overall tax rate to a flat 5.8 percent.

People with higher incomes will no longer pay higher tax rates. In fact, the more one earns, the more he or she will save under the new law.

Not everyone will come out ahead under the new system, however. Rabon acknowledges that some people may ending up paying more in state taxes than they have in the past, but he says most people will end up paying less.