How to Fill Out and File Form NC-5: North Carolina Withholding Return

Form NC-5 is the North Carolina Withholding Return that employers use to report and pay the state income tax they withheld from employee wages during a monthly or quarterly period. The form has four lines. Filing it on time, every assigned period, is what keeps your withholding account in good standing with the Department of Revenue.¹

One boundary to set first. If the Department has assigned you to the semi-weekly tier, you don’t file NC-5 at all — you follow the federal deposit schedule and file Form NC-5Q instead.² Everything below is for monthly and quarterly filers.

Filing Frequency and Deadlines

The Department assigns your frequency based on how much state income tax you withhold each month on average, under N.C.G.S. § 105-163.6. Stay on the schedule you were assigned until you get a written notice changing it; don’t switch on your own because a single month ran high or low.²

Quarterly filers withhold less than $250 per month on average. Returns are due by the last day of the month following the end of each calendar quarter: April 30, July 31, October 31, and January 31.

Monthly filers withhold at least $250 but less than $2,000 per month on average. Returns for January through November are due by the 15th of the following month. The December return is due January 31, not January 15 — a deadline that catches people who assume the pattern holds.²

When a deadline falls on a Saturday, Sunday, or legal holiday, the return is timely if filed or postmarked on the next business day.

How to Fill Out Form NC-5

The form is a fillable PDF on the Department of Revenue’s website, and the same data entry appears in the online filing portal. Before you start, pull together your NC withholding account number, your Federal Employer Identification Number (or Social Security Number if you’re a sole proprietor), and the payroll records for the period.¹

Header

Enter the period the return covers using the blocks provided. Monthly filers write the calendar month and year (for example, “January 2026”); quarterly filers write the calendar quarter and year. Add your legal business name in capital letters, your NC withholding Account ID, and your FEIN or SSN. Verify the account number digit by digit. A transposed number sends your payment to another taxpayer’s ledger.

The Four Lines

Line 1 is the total North Carolina income tax you were required to withhold for the period — the gross withholding from payroll, not a net figure after adjustments.

Line 2 is penalty. Leave it blank if you’re filing on time. If you’re late, the failure-to-file penalty is 5% of the tax due for each month or fraction of a month the return is overdue, up to 25%. A separate 5% penalty applies if you failed to withhold at all.

Line 3 is interest. The Secretary of Revenue sets the rate every six months. For January 1 through June 30, 2026, the rate is 7%.³

Line 4 is the sum of Lines 1, 2, and 3. That total is what you owe.

How to Submit the Return

The Department strongly encourages electronic filing and offers it at no cost. From the NC-5 page on the NCDOR site, you can enter your withholding data and authorize an ACH debit from your business bank account in one session. If you file and pay online, don’t mail a paper form for the same period.⁴

If you file on paper, print the Department’s PDF and mail it to the address shown on the form. The mailing address is different depending on whether you’re enclosing payment: returns with a check or money order go to the payment-processing address, and zero-balance returns go to a separate document-imaging address. Use the version of the form the Department sends or generates for your account so the address is current.¹

Zero Returns and Seasonal Filers

If you had no employees or withheld nothing during the period, you still file the return with zero on Line 1. Skipping a period because the amount is zero puts your account out of compliance and can trigger notices you’ll then have to answer.⁵

There is one exception. If your business pays wages for six or fewer months of the year, you can register as a seasonal filer and specify your active months. Seasonal filers don’t have to submit returns for the off-season periods.⁵

Penalties and Interest If You File Late

North Carolina imposes two separate penalties that can stack on the same late return:

Failure to file: 5% of the tax due for each month or fraction of a month the return is late, capping at 25%.⁶
Failure to pay: 2% of the unpaid tax for each month or fraction of a month the payment is late, capping at 10%.⁶

Interest runs on top of both. The form instructions also warn that willful failure to comply with the withholding statutes can trigger criminal penalties.¹

A concrete example. A return filed two months late on $5,000 in withheld tax costs $500 in failure-to-file penalties (10%) plus $200 in failure-to-pay penalties (4%), plus interest. If you can’t pay the full amount, file the return on time anyway. The filing penalty is steeper than the payment penalty.

Annual Reconciliation and Closing the Account

Form NC-5 covers period-by-period reporting only. At year-end, you also file Form NC-3, the Annual Withholding Reconciliation, which ties your NC-5 totals to the W-2s you issued. Check the Department’s withholding forms page for the current year’s NC-3 deadline and e-filing instructions.⁷

If you stop paying wages or close the business, file your final NC-5 for the last period in which wages were paid, then submit Form NC-BN (Out-of-Business Notification) through the Department’s online portal to close the withholding account. Leaving the account open without filing generates the same missing-return notices you’d get from forgetting.⁸

Recordkeeping

Keep copies of every NC-5 return, the payment confirmations, and the payroll records that support the withholding amounts. Federal rules require employment tax records to be retained for at least four years after filing the fourth-quarter return for the year, so 2026 records should be kept through at least 2031.⁹ Hold on to W-4s, deposit confirmations, and any correspondence from the Department of Revenue for at least that long.

1
North Carolina Department of Revenue. Form NC-5 North Carolina Withholding Return
2
North Carolina General Assembly. North Carolina Code 105-163.6 – When Employer Must File Returns and Pay Withheld Taxes
3
North Carolina Department of Revenue. Interest Rate
4
North Carolina Department of Revenue. Form NC-5 North Carolina Withholding Return – File and Pay Online
5
North Carolina Department of Revenue. Withholding Tax Frequently Asked Questions
6
North Carolina General Assembly. North Carolina Code 105-236 – Penalties
7
North Carolina Department of Revenue. Withholding Tax Forms and Instructions
8
North Carolina Department of Revenue. NC-BN Out-of-Business Notification
9
Internal Revenue Service. Employment Tax Recordkeeping