What You Need to Know About Tax Payment Plans In North Carolina

BJ Lynch
Expert Contributor
Last Updated:
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  • In North Carolina (NC), you can settle state tax debts through approved payment plans.
  • The North Carolina Department of Revenue (NCDOR) will only offer an installment agreement or payment plan to taxpayers that receive a notice from the NCDOR.
  • To be approved for an NC state tax payment plan, you must be able to meet specific parameters and requirements that have been spelled out by the NCDOR.

When having tax troubles, it can be hard to find the help you need. Solvable is here to offer you a wealth of tax knowledge and a user-friendly platform to connect you with reputable tax professionals. State tax debt can be complicated as each state can vary in how tax they allow the settling of debts. In North Carolina, obtaining an NC state tax payment plan is dependent on the factors we will be discussing in this article.

State Tax Debt

State tax debt can is avoidable by making sure that your taxes are filed and paid promptly. Though this is the ideal strategy for staying current on your taxes, there are times when circumstances cause you to fall behind on your taxes. Learning how to handle tax debts associated with the state in which you live or do business is of the utmost importance when looking to resolve a state tax deficit.

North Carolina Installment Payment Agreements

If you live in or run a business in NC, you are not allowed to request a payment plan or an Installment Payment Agreement until you receive an official notice from the NCDOR. If you are unable to pay what you owe in full by the date due, you are encouraged to pay as much as you can afford up front and to make payments via the D-400V application while you await correspondence from the NCDOR. Once you have the official notice from the NCDOR in hand, we suggest that you immediately request an Installment Payment Agreement via the RO-1033 form.

Once you have received the notice from the NCDOR, you can request an Installment Payment Agreement as outlined in the parameters that follow:

The NCDOR sets parameters that allow those with an individual income to pay the debt over time. The amount of debt will determine the length of time. For $1,000 or less you will need to pay in full within 15 months. For $1,000 to $6,999 you will need to pay in full within 30 months. For $7,000 to $49,999 you will need to pay in full within 40 months. For $50,000 or more you will need to pay in full within 50 months. Businesses have 12 months to pay in full for any amount they may owe.

What You Need to Know About Tax Payment Plans In North Carolina

If you cannot adhere to the specified parameters, you will be required to provide the NCDOR with further information for review. Collection Information Statements are used to give the NCDOR important details allowing them to decide if you can meet parameters.

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The Collection Information Statements are different for individuals and businesses. Individuals are to use the RO-1062 form and businesses are to use the RO-1063 form.

The RO-1063 form will require businesses to supply additional information that includes:

  • Three months of statements from their bank.
  • Supporting documents for business expenses.
  • The income they list on the form.

These forms are to be marked Attn: Collections and mailed to your local service center. NC has multiple service centers located throughout the state.

Strict requirements apply to you and the NCDOR. You, the taxpayer, must uphold the agreement by filing and paying all of your tax returns in full for the life of the agreement. You will also need to list an active checking or savings account in the agreement forms and allow the NCDOR to draft scheduled payments directly from your account. If you miss scheduled payments, or a payment is returned to the NCDOR by your bank, the agreement will go into default.

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You must pay and file estimated income taxes on time, while ensuring you enter your correct filing status and how many allowable exemptions you have on your NC-4s form. You will need to give any further information the NCDOR may request. This information may include reviews of your finances throughout the life of the agreement.

The information they obtain can show if the agreement is still necessary or if the collection of the full debt is in jeopardy. The agreement will go into default if you are not able to meet the specified requirements or any future conditions arise that jeopardize the collection of the debt. If for any reason the agreement enters a default status, you will be unable to reverse that status.

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The NCDOR must uphold their side of the agreement as well. They must refrain from the seizing or levying of property. This only applies as long as the agreement does NOT go into default and as long as the collection of the debt in full is NOT in jeopardy.

As long as the NCDOR did NOT impose the 20% Collection Assistance Fee before the set up of the agreement, they can NOT impose it for the life of the agreement. If they implement the fee before the agreement, the balance of the debt will reflect the 20% Collection Assistance Fee. For the life of the agreement, the NCDOR will apply any tax refunds or lottery winnings you may receive to your debt.

Written notification from the NCDOR of any change to the agreement due to your finances will be mailed to you 30 days in advance. If the NCDOR feels that the interests of the state need protection, they will issue you an NC Certificate of Tax Liability (CTL). This can take place even if the agreement is NOT in default. If you have concerns regarding a possible CTL, you should address it with the NCDOR before entering an agreement. The NCDOR can and will implement legal action against you if you have defaulted on any of your agreement terms.

Acquiring an NC state tax payment plan can be an overwhelming task, and this is true of other states as well. Knowing how your specific state handles tax debt will help you when seeking to pay back your debt in installments. Solvable has done the hard work for you by vetting tax professionals and providing you with an easy way to connect with the companies we endorse.

 

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BJ Lynch
Expert Contributor
Last Updated: