Important North Carolina Reporting Obligation for Issuers of Forms 1099 – TIME SENSITIVE

Jan 15, 2019

If your business issues IRS Forms 1099-MISC to recipients located in North Carolina there is a critical reporting deadline on January 31, 2019 which you should be aware. Issuers sending 2018 Forms 1099-MISC to NC recipients need to submit another copy of these forms to the NCDOR (either in paper or electronically) to avoid tax penalties. This requirement applies to any Form 1099-MISC where the NC recipient will have income in either Box 3 (“Other Income”) or Box 7 (“Nonemployee Compensation”). This is a requirement regardless of whether the Form 1099-MISC reports NC tax withholdings or not.

Here’s how to comply. If you are utilizing a third-party provider to assist with your NC wage and contract labor reporting, make sure they are aware of this issue and are complying on your behalf. If the paid preparer is unaware of this issue, please share NCDOR’s guidance on the matter from the links below.

If you prepare Forms 1099-MISC internally, read the links below. First, consider whether you’ve included any NC tax withholdings from either Forms W-2 or Forms 1099 in your North Carolina Form NC-3 withholding summary report. Second, review your 1099-MISC forms for instances where NC recipients have income in Box 3 or Box 7. If you have 1099s with that fact pattern, you’ll need to remit a copy to NCDOR by January 31st. These can be submitted electronically using the eNC3 tool provided by the state or in paper. If you choose to send copies of your applicable Forms 1099 in paper, make sure to include a cover letter that states your business name, taxpayer identification number and a statement that the Forms 1099 are attached in accordance with NCDOR guidance. You can mail paper Forms 1099 to NCDOR at the following address:

North Carolina Department of Revenue
P.O. Box 25000
Raleigh, NC 27640-0001

NCDOR October 2018 Reporting Announcement

NCDOR January 11, 2019 Reporting Update- Eliminates Electronic Filing Obligation