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N.C. Tax Changes to Affect Pay in 2014

As part of a new North Carolina law, all taxpayers will pay a lower rate and be granted a higher standard deduction, but taxpayers may no longer claim personal exemptions for themselves, their spouse, children, or any other qualifying dependents.

The law, which becomes effective Jan. 1, 2014, requires all employees to submit a new Employee's Withholding Allowance Certificate (either Form NC-4 EZ or Form NC-4) or default to single marital status and zero withholding allowances.

"Many employers have opted to require all employees to submit new forms before the end of the year," said Robin Miller, assistant vice president for Duke's Disbursement Services. "We wanted to make it easier for the majority of employees at Duke, so we will default everyone to the single and zero withholdings and allow anyone who needs to make other changes to do so."

If Duke collected new forms from every employee, including student workers and part-time employees, Corporate Payroll Services would have to process about 37,000 forms manually before the first payroll deadlines for 2014.

Instead, Duke officials are encouraging employees who want to override the default withholdings to do so through the Duke@Work self-service website under the "MyPay" tab. Withholdings must comply with the new state law. According to the new Form NC-4 EZ and Form NC-4, "Most taxpayers will not be entitled to as many allowances, and as a result, more taxpayers should claim zero (0) allowances."

In order for changes to take effect before the first pay date in 2014, changes must be made by the these payroll deadlines:

  • Biweekly-paid employees (nonexempt) must submit any changes by Dec. 30,
  • Monthly-paid employees (exempt) must submit any forms to override by Jan. 10, 2014.

Employees can also use Duke's Take Home Pay Calculator to project how the tax changes for 2014 and changes in withholdings will impact their net pay. 

The change in the North Carolina tax withholdings does not affect federal withholdings. Faculty and staff may still claim a personal exemption for themselves, their spouse, children, or any other qualifying dependents for federal tax purposes.

Duke employees who have specific questions on how to update the online form should contact Corporate Payroll Services at payroll@duke.edu. However, Duke is not authorized to provide tax advice. Employees with questions regarding the number of allowances to claim should consult with their tax professional. Additional information is also available at the North Carolina Department of Revenue website.