How does North Carolina tax remote workers?

There are a few situations to consider. You may fall into more than one category.

1. I lived in North Carolina.
• If you are considered a full-year or part-year resident of North Carolina, you'll be taxed by North Carolina on all income earned from any source during your time of residency. Be sure to file the appropriate return.
2. I worked remotely from North Carolina.
• North Carolina taxes income earned for personal services performed while in North Carolina (even if you're a nonresident). This includes remote work for an employer or clients based outside North Carolina if you were physically in the state while doing the work.
• You may be able to claim a credit for taxes paid to another state on your resident return for any income required to be reported in multiple states.
3. My employer was based in North Carolina.
• If your employer was based in North Carolina, they may have withheld North Carolina taxes from your North Carolina wages as shown on your W-2. However, if you didn't live or physically work in North Carolina, you won't owe North Carolina taxes on those wages and can file a nonresident return to claim a refund of those withholdings.
• If your employer didn't withhold North Carolina taxes and you were a nonresident of North Carolina, you probably don't need to file a North Carolina return at all unless you otherwise have a North Carolina nonresident filing requirement.

If your wages were minimal and you didn't do any other business in North Carolina, it's possible you'll be exempt from filing regardless of residency. See the North Carolina D-400 instructions for more information.