NCDOR Communication

Contact: Thomas Beam, External Communications
(919) 715-7399

December 22, 2009

State Withholding Now Required For Contractors With ITINs

Effective Jan. 1, 2010, businesses, organizations or individuals in North Carolina that pay more than $1,500 per year to a contractor with an Individual Taxpayer Identification Number (ITIN) must withhold 4 percent of that pay

ITINs are issued by the Internal Revenue Service to people who are not eligible to receive a social security number.    

All the details about this requirement are available here.

This new law applies to compensation “other than wages,” which means pay from which state and federal income taxes are not required to be withheld.  ITIN holders who are paid as employees as opposed to contractors and who already have state and federal taxes withheld from their pay are not subject to additional state withholding. 

Payers should file and pay withholding taxes on contractors with ITINs just like they would for regular employees, using the same online process or forms and the same filing and paying frequency.  Payers that are subject to this new withholding requirement and that don’t currently file and pay withholding taxes must register with the state and receive a withholding account number so they can begin filing and paying the taxes.   Click here to review frequently asked questions about withholding.    

Questions, Or To Get More Information

Please call the Taxpayer Assistance and Collections Center at 1-877-252-3052 if you have any questions about this issue.

This communication is accurate and up to date as of the date of publication, which is listed above the headline. It may be superseded by a change in tax laws or an updated version of the communication.