Excess Wage Information for Multi-State Employers

Employers are allowed to use wages reported to other states for employees also reported to North Carolina in the computation of excess wages. Using only the North Carolina wages, the employer's excess wages may appear incorrect. In these situations the employer is asked to supply us with proof that tax has been paid on the correct wages in another state(s). The employer may wish to provide paper copies of the reports filed with the other state(s) or may provide the data on magnetic tape in a prescribed format. The booklet, Use of Magnetic Media for Reporting Out-of-State Wages in Response to an Excess Wage Audit, is available for download in Microsoft Word 6.0 format.

When wages are paid in another state(s), excess wages are computed by quarter using wages paid in the other state(s) during the quarter before using wages paid in North Carolina to meet the taxable wage base. Only wages paid up to the taxable wage base in each state can be used to meet the taxable wage base in North Carolina.

Below are scenarios depicting the computation of excess wages for a single employee earning wages in multiple states.

Scenario 1

SC 7000 1000 1000 1000 0 1000 0 1000 0
VA 8000 1000 1000 1000 0 1000 0 1000 0
GA 8500 1000 1000 1000 500 1000 0 1000 0
NC 13200 5000 5000 5000 4700 5000 0 5000 0

Scenario 2

VA 8000 5000 5000 5000 0 5000 0 5000 0
NC 13200 5000 5000 5000 3200 5000 0 5000 0

Scenario 3:

NJ 17200 5000 5000 5000 5000 5000 0 5000 0
NC 13200 5000 5000 5000 0 5000 0 5000 0

Download the booklet, Use of Magnetic Media for Reporting Out-of-State Wages in Response to an Excess Wage Audit.

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