Status
State backup withholdingRequiredPrimary source (statute, regulation or agency publication saved in full)
Non-wage payments to nonresidentsRequiredPrimary source (statute, regulation or agency publication saved in full)
Federal backup withholding under IRC 3406 (24 percent on a missing or mismatched TIN) applies in North Carolina exactly as everywhere else; this page covers only what the state adds. The 50-state tables put North Carolina next to its neighbours, and the North Carolina 1099 filing page covers whether the state wants its own copy of the 1099.
State backup withholding
Trigger
State-specific TIN trigger (not tied to federal 3406): a person who performs services in NC for non-wage compensation and fails to provide the payer a TIN, or provides a TIN the Secretary notifies the payer is invalid, is a “payee” subject to 4% withholding once paid more than $1,500 in the calendar year. Entities must furnish a TIN for NC purposes even if not required federally. Same 4% rule covers ITIN contractors.
Rate
4% of compensation paid for services performed in North Carolina
Statute
N.C. Gen. Stat. 105-163.1(9a)(c)-(d) (definition of payee), 105-163.3 (certain payers must withhold); NC-30 Section 7
Withholding return and forms
Form NC-BR registration; Forms NC-5 / NC-5P / NC-5Q remittance and returns (same as wage withholding unless a separate non-wage account is requested); Form NC-3 annual reconciliation; Form NC-1099M (or federal
1099-MISC/
1099-NEC showing NC withholding) to payee
Deposit schedule
Same as wage withholding (quarterly, monthly, or semiweekly by filing frequency); may be reported under a separate NC withholding ID
Annual reconciliation
Form NC-3 with NC-1099M / 1099-NEC / 1099-MISC copies, e-filed by January 31
Payee statement
Form NC-1099M (or federal 1099-MISC/NEC reflecting NC tax withheld) by January 31, or within 30 days of final payment if services end before year end; leave TIN blank if none provided
Exemptions
Payments of $1,500 or less when the payer does not expect to exceed $1,500; wages subject to 105-163.2; ordained clergy; entities exempt under 105-130.11; H-2A agricultural workers not subject to IRC 1441; disaster-response ITIN contractors
Withholding on non-wage payments to nonresidents
Applies to
(1) Nonresident contractors: nonresident individuals and nonresident entities (foreign LLCs/corporations without a NC certificate of authority; partnerships without a permanent NC place of business) paid non-wage compensation for personal services in NC in connection with a performance, entertainment, athletic event, speech, or creation of a film, radio or TV program. (2) ITIN contractors (any services in NC). (3) Persons failing to provide a (valid) TIN. General nonresident contractors outside the performance/speech/film categories are NOT covered unless ITIN or no-TIN.
Threshold
More than $1,500 paid to the payee in the calendar year; if payer expects to exceed $1,500, withhold from the first payment
Rate
4% of compensation
Statute
N.C. Gen. Stat. 105-163.1(6a)-(9a), 105-163.3; Directive PD-98-3; NC-30 Section 7
Withholding return
NC-5 / NC-5P / NC-5Q (same account as wages, or a separate non-wage account via Form NC-BR); NC-3 annual reconciliation
Exemption certificate or waiver
None prescribed; payer must keep documentation: NC address and SSN for residents, Secretary of State ID number for registered corporations/LLCs, partnership address and TIN, federal determination letter for tax-exempt entities
Payee statement
Form NC-1099M (Compensation Paid to a Payee) or federal 1099-MISC/1099-NEC showing NC withholding, by January 31 or within 30 days after the last payment
Due dates
Remittance follows the payer's wage withholding frequency; NC-3 and payee statements due January 31
Exceptions
Payee is a NC resident; corporation/LLC with a NC certificate of authority; partnership with a permanent NC place of business; tax-exempt entities (105-130.11); clergy; H-2A workers; compensation $1,500 or less; substantiated accountable-plan expense reimbursements; escrow amounts until released; promoter rules (venue vs promoter responsibility)
Pass-through entity withholding (out of scope)
Separate NC withholding/composite rules for nonresident partners and S corporation shareholders exist (105-154, 105-131.7). Entity-level withholding on distributions to nonresident owners is a duty of the entity, not of a payer, and is not covered on this page.
From the source
“is subject to the 4% North Carolina income tax withholding requirement from the non-wage compensation”
NCDOR, Withholding Tax Frequently Asked Questions, read November 1, 2026
Sources
Each source below was read and saved on November 1, 2026; the page is built from the saved text. Statutes are cited to the section; department pages and publications to their title and, where shown, revision date.