Need North Carolina Help

[TAXBILLY]

I have a single client who moved from Florida to North Carolina March 1, 2010. He met a lovely woman, a year long NC resident, and they fell in love (he 75, she 66). They married Dec 15, 2010.

I'm unsure how to file their NC return. She only has social security income and the rest of the income is his. Any guidance would be appreciated.

taxbilly

[Pacun]

I have a single client who moved from Florida to North Carolina March 1, 2010. He met a lovely woman, a year long NC resident, and they fell in love (he 75, she 66). They married Dec 15, 2010.

I'm unsure how to file their NC return. She only has social security income and the rest of the income is his. Any guidance would be appreciated.

taxbilly

This rule applies to most states. I don't prepare NC returns but here you go.

File Federal MFJ and file state MFS for both and he needs to file part year.

[TAXBILLY]

This rule applies to most states. I don't prepare NC returns but here you go.

File Federal MFJ and file state MFS for both and he needs to file part year.

She has to file separately even though her only income was Social Security?

taxbilly

[JohnH]

Taxbilly:

The NC return piggybacks off the Federal return. They will retain their MFJ status on the NC return. There's a place in the "Data" sheet of the NC FOdm D-400 to indicate residency status - that's where you tell them he's a part-year resident and she's a full-year resident.

There's an income allocation worksheet you can click through to when the NC return is being fillet out (not a separate shedule - you bunny hop to it from Line 54 on the back of the NC Retur. Once you work through the allocations of income you'll see how it all fits together. If there happens to be any taxable SocSec income on the Federal, it will be wiped out on the NC return.

Remember that NC exempts the first $2,000 of private retirement benfits (more for Federal retirememt benefits and certain other ones). I don't know if that allocates for a Part-Year resident or not.

[Terry D EA]

Taxbilly, John H is correct with his instructions on how to handle this. Social Security is not taxable to NC and I don't think there is a residency requirement for the credit for private retirement benefits. If you input this on the W-2, then the program will calculate for the credit. BTW, I have not ever heard of different filing status's for Federal and State. Matter of fact, I have not ever seen the option to change the filing status when preparing a state return. I would ignore that suggestion.

[JohnH]

Terry - there are states which require mfs when one spouse is a resident ndthe other is a non-resident or a part year resident. Until a few years go, SC required this treatment by NC residents when one spouse worked in SC and the other did not. But as you say, NC has a fairly straightforward way of handling this situation.

[TAXBILLY]

Thanx to all for the info.

taxbilly