North Carolina State Tax Penalties

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Pay your taxes on time to avoid paying penalties and interest.
Pay your taxes on time to avoid paying penalties and interest. (Image: tax forms image by Chad McDermott from Fotolia.com)

If a North Carolina resident fails to pay his state taxes in full by April 15th, the state may assess penalties and interest on the outstanding balance. Interest is calculated from the due date, April 15th, to the date of payment, even when an extension is granted.

Late Filing

If an individual files his state taxes late, the state of North Carolina can charge a late penalty of five percent of the unpaid tax every month the return is late. For example, if an individual is two months late, the state of North Carolina can charge five percent twice, or 10 percent. However, the total late fees cannot exceed 25 percent of the total unpaid tax that's due. In other words, after five months, North Carolina will stop assessing this fee.

Late Payment

The state can charge a late penalty of 10 percent on any unpaid tax that is paid late. If an individual has an extension, however, and if 90 percent of what is owed was paid on time, no penalty will be accessed if the remaining 10 percent is paid by the end of the extension.

Overdue Tax

The North Carolina Department of Revenue can attach a Collection Assistance Fee on all unpaid taxes that are more than 90 days past due. The Collection Assistance Fee is equal to 20 percent of the unpaid taxes. However, this fee does not apply if the individual is making payments on a payment plan.

Other Penalties

If any individual writes a bad check, the Department of Revenue will tack on a penalty of 10 percent of the check amount. However this penalty may not exceed $1,000. Additionally, a negligence penalty of 10 to 25 percent may be attached if an individual makes erroneous statements, such as underestimating income or overestimating deductions on his tax filing.

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