Question

Working in NC and living in SC- state tax rates are different

Forum|Forum|7 years ago
June 1, 2019
1 reply
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I moved to SC in March of 2016. I work in NC. When using turbo-tax it advises me to choose the part time resident option for 2016 (since I was not here all year) and when I choose that option my taxes come out fine. If I choose full time resident it says I owe $2800. My concern is that next year when I am a full time resident for all of 2017 I am going to owe money to SC. How can I prevent that from happening? Is this caused by the fact that NC has a 6% state income tax and SC has 7%? I asked my employer about that and they said they are taking the correct amount out of my checks based on NC state law but I don't see how that is right if I am going to owe money.

TurboTax Premier Online

DanielV01

Employee

It depends. Your current situation requires you to file two separate tax returns. If you live in SC all year, you will file a resident return to SC and a non-resident return to North Carolina. Although South Carolina taxes the same income, you will get a credit for taxes that you pay to North Carolina.

If you wish to avoid owing, you can ask your employer to withhold some taxes to South Carolina (if there is a form for this). If not, you can still make estimated tax payments. Of course, if North Carolina tax is greater than South Carolina tax, then you will owe zero to South Carolina.

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