A businessman responds to new NC-4 tax forms

by Denny Shaffer, business owner and former Fayetteville City Council member, published in Fayetteville Observer, December 13, 2013.

We are nearing the gift-giving season, and as an employer, I got an early one from the N.C. Department of Revenue dealing with income-tax deduction.

It says "IMMEDIATE ACTION REQUIRED" in bright blue letters, so I put it in the pile of papers for me to get to later.

Yesterday was later, and I have now read the 18 pages. Notice I said read, not understood. That will not, however, keep me from sharing my impressions with you or from following their directive to "work with your employees to determine which form (Form NC-4 EZ or Form NC -4) is most suitable for their filing preference." (This from the Republican administration that promised to get government off the backs of small business?)

So first, NC-4 EZ or EZ for short, though it really is not. It is the form they seem to wish you to use. They point out that you can use it even if you want to itemize deductions when you file your taxes. But EZ tells you quickly you are now "no longer allowed to claim a N.C. withholding exemption for yourself, your spouse, your children or any other qualifying dependent." So dependents are out and allowances are in, for now. Clear? And if that worries you, they advise you that "additionally, many deductions and tax credits that impact North Carolina withholding tax are no longer available for tax years beginning on or after January 1, 2014."

Then EZ asks how many allowances you are claiming for 2014, and tells you they are zero or the number from the table above. Actually, there are three tables above.

One is Single & Married Filing Separately, another Married Filing Jointly & Qualifying Widow(er). I really can help you here. They did not mean "&". The word they were looking for is "or." So you need not be both Single and Married. Single or Married will work just fine.

So these charts help you find the correct number of allowances. Single with two children under 17? (I assume they believe that you throw your kids out on their 17th birthday). Then you get one allowance. But if you have eight children under 17, you get six allowances unless you make over $20,000 a year in which case you get five.

Now your employer, who may know even less about this than I do, must not only advise you on which form is "most suitable" for you, but must also furnish you with the forms.

Of course there is help available from the N.C Department of Revenue. You can visit its website at www.dornc.com or call the department at 1-877-252-4487. I did that to find out how to carry out the responsibility assigned by the governor and state legislature as part of getting government off my back. Yes, the charming lady said, I need to furnish all of my employees with forms like those sent to me. Just download them.

I pointed out that while I only have 10 employees, what was sent me was 18 pages, so that I would have to download 180 pages? "Yes, or just copy them," she said.

Now I know how the new administration is reducing costs. Here boss, just make copies of this for me and pass them out. And don't forget to advise them on which forms to use. Thanks, Gov.

Now EZ is what I have been alluding to. For help with NC-4 go to the furnished "NC-4 Allowance Worksheet." While it is called a sheet, it really is four sheets. But who is counting? It really seems to me they just want you to give up and put zero down for allowances. As the lady said when I talked with her, you can always make adjustments later.

Now there is good news. Those Republicans did something they said they would do. Well, yes they have drastically diminished the quality of education in North Carolina. And refused the Medicaid help that would have certainly saved lives and not cost the state a cent. No, they had not given us a clue that is what they had in mind while running for election. But they did talk about cutting taxes, and should be given credit for that. If they did.

The rate next year will be 5.8 percent. The lady on the help line advised me that it has been 6 percent, 7 percent and 7.25 percent. Well that is great news.

But having spent many years watching the shell game that often passes for governance, I asked the question: "Will this change in system cause folks to pay more or less North Carolina income tax next year?"

Her answer? "Some will pay more. Some will pay less. It depends on the individual situation."

So there you have it. Certainly, those teachers and teacher assistants who got fired will be paying less, on less income. And I would venture that Art Pope, the governor's multimillionaire budget director, will be paying less, on more income.

For my employees? Just file the EZ, claim zero. Talk to me after the computer figures out what will come out of your pay after Jan. 1, 2014.

And good luck.