N.C. delays tax filing, but future cuts to personal income taxes a boon for residents | Eastern North Carolina Now

    Publisher's Note: This post appears here courtesy of the Carolina Journal. The author of this post is John Trump.

    Tax season in North Carolina won't open until Feb. 28.

    Changes in the tax law, part of the state's $25.9 billion spending plan passed last year, have delayed the Department of Revenue from finalizing certain tax forms, the department says.

    This also includes updates for tax systems and approval of tax preparation software.

    "Accurately processing 2021 tax year returns and issuing refunds in a timely manner is a priority for the N.C. DOR," a news release says.

    Some taxpayers, including those who have filed federal taxes electronically, have become frustrated with their inability to file N.C. taxes.

    "Taxpayers can expect to begin to receive refunds in early April," the Revenue Department says. "We continue to encourage taxpayers to file electronically. Agency employees are working continuously on testing and certification requirements that are necessary in order to open the North Carolina tax season and have made significant progress."

    The Revenue Department notifies tax software providers when their software is approved, and some software products have already been cleared. Taxpayers should routinely check to confirm if their tax preparation software has been approved, DOR says.

    Senate Bill 105 - the first budget Gov. Roy Cooper has signed - lowers the personal income tax rate from 5.25% to 3.99% over six years and phases out the corporate income tax beginning in 2025 and ending in 2031. Tax cuts were one of the priorities for Republican leadership over the past decade and a point of contention for Democrats.

    The budget also contains a higher standard deduction that increases the number of people who owe no state income tax. Starting with the 2022 tax year, married couples earning up to $25,500 will pay no income tax. An increase in the child tax deduction by $500 per child was also included.

    "The efforts of the General Assembly to cut personal income taxes are a boon to taxpayers and most small businesses in the state, allowing them to keep more of their income," said Paige Terryberry, senior analyst for Fiscal Policy at the John Locke Foundation.