This initiative identifies taxpayers who have filed both federal and state returns, but your taxable income does not match on each return. North Carolina individual income returns start with the amount of taxable income on your federal return, also called your Federal Taxable Income (FTI).
Taxpayers receive a “Notice of Individual Income Tax Assessment” when the FTI reported on their North Carolina return is not the same FTI reported on their federal income tax return. The notice shows that the department has made an adjustment to accurately report the correct FTI on the state return.
The notice reflects tax, penalty and any interest owed by the taxpayer. The amount due is calculated by using information from the Internal Revenue Service.
What should I do now?
If you agree with the assessment, pay the total amount due. Payment options and instructions can be found on the previous page.
If you do not agree with the assessment:
- Provide information to show that our adjustment of your FTI is in error to Correspondence Unit, PO Box 1168, Raleigh, NC, 27602.
- If you have already filed an amended state individual income tax return, please mail supporting documentation along with your notice to the Correspondence Unit, PO Box 1168, Raleigh, NC, 27602.
- Request the department review the assessment as the first step in your appeals process. Your request for review must be received within 45 days of the date of the notice.
Action is required within 45 days of the date of the Notice of Individual Income Tax Assessment. This information is also found on your notice.