§ 105-163.5. Employee exemptions allowable; certificates. - North Carolina Statutes

§105‑163.5.  Employee exemptions allowable; certificates.

(a)        An employeereceiving wages is entitled to the exemptions for which the employee qualifiesunder Article 4 of this Chapter.

(b)        Every employeeshall, at the time of commencing employment, furnish his or her employer with asigned withholding exemption certificate informing the employer of theexemptions the employee claims, which in no event shall exceed the amount ofexemptions to which the employee is entitled under the Code.  If the employee failsto file the exemption certificate the employer, in computing amounts to bewithheld from the employee's wages, shall allow the employee the exemptionaccorded a single person with no dependents.

(c)        Withholdingexemption certificates shall take effect as of the beginning of the firstpayroll period that ends on or after the date on which the certificate isfurnished, or if payment of wages is made without regard to a payroll period,then the certificate shall take effect as of the beginning of the miscellaneouspayroll period for which the first payment of wages is made on or after thedate on which the certificate is furnished.

(d)        If, on any dayduring the calendar year, the amount of withholding exemptions to which theemployee is entitled is less than the amount of withholding exemptions claimedby the employee on the withholding exemption certificate then in effect withrespect to the employee, the employee shall, within 10 days thereafter, furnishthe employer with a new withholding exemption certificate stating the amount ofwithholding exemptions which the employee then claims, which shall in no eventexceed the amount to which the employee is entitled on that day.  If, on anyday during the calendar year, the amount of withholding exemptions to which theemployee is entitled is greater than the amount of withholding exemptionsclaimed, the employee may furnish the employer with a new withholding exemptioncertificate stating the amount of withholding exemptions which the employeethen claims, which shall in no event exceed the amount to which the employee isentitled on that day.

(e)        Withholdingexemption certificates must be in the form and contain the information requiredby the Secretary.  As far as practicable, the Secretary shall cause the form ofthe certificates to be substantially similar to federal exemption certificates.

(f)         In addition to anycriminal penalty provided by law, if an individual furnishes his or heremployer an exemption certificate that contains information which has no reasonablebasis and that results in a lesser amount of tax being withheld under thisArticle than would have been withheld if the individual had furnishedreasonable information, the individual is subject to a penalty of fifty percent(50%) of the amount not properly withheld. (1959, c. 1259, s. 1; 1973,c. 476, s. 193; 1981 (Reg. Sess., 1982), c. 1277; 1989, c. 728, s. 1.43; 1997‑109,s. 2.)