North Carolina imposes a tax on all forms of income earned in the state. This means that if you have lived or worked in North Carolina for any part of the year and earned income there, you may have to file a state tax return. It is important to note that state tax guidelines differ from federal tax guidelines, so you may be required to file a North Carolina state tax return even if you do not have to file a federal tax return.c Additionally, the deadline for North Carolina taxes has been extended to April 18, 2011, for the 2010 tax year.c 

The best way to find out which tax laws apply to you is to visit the North Carolina Department of Revenue website. There you can find information about all of the relevant tax laws. If you do not have access to the Internet, you can also get this information by calling the Department of Revenue directly or by visiting your local library.c 

The first thing you need to do to prepare North Carolina taxes is to assemble all of the necessary tax information. To complete your return, you'll need the following:

1. Your full name and complete mailing address
2. Your Social Security number
3. Your spouse's name and Social Security number if you are filing a joint tax return
4. A copy of your federal income tax return if you are filing one
5. The amount of your total taxable income in North Carolina––Generally, this is reported on a Form W-2 or a Form 1099. If you are self-employed, you will need to report the total of your earnings for the past year.
6. The amount of North Carolina taxes that you have already paid or had withheld from your wages––This can also be found on your W-2 or 1099.

If you are filing a federal income tax return, it is useful to complete that before you begin working on your state return. This will help you to have most of the above information ready for your North Carolina tax return. If you are not required to file a federal tax return, you will still want to have a copy of the IRS Form 1040 on hand. This will help you to figure amounts that you will need to report on your state taxes.c  

Your next step is to get a copy of the form needed to file your North Carolina state taxes. This form is called a Form D-400 "Individual Income Tax Return." If you have access to the Internet, you can download this form and the accompanying instructions from the North Carolina Department of Revenue website.c   

You have a few options if you are downloading the form.c There is a web fill-in version that you can download and then complete on your computer. You would then print it out and mail it in. If you prefer to complete your form by hand, you can download the traditional form, print it out and complete it. If you will be claiming tax credits, you will need to download the form version that includes Form D-400TC.c 

Whatever version you choose, be sure to get the form instructions as well. You will need them to help you work through any applicable credits or deductions and to calculate your tax liability. If you do not have Internet access, you can pick up a copy of this form at your local public library or by calling the Department of Revenue and requesting a copy.c 

If you are using tax preparation software or a tax service website to complete your federal tax return, you will usually be given the opportunity to include your North Carolina state tax return for an additional fee. This option will generally be the most convenient, since you will be able to directly import the necessary information from your federal return.c  

Once you have your necessary tax forms, you can start completing them. To start the Form D-400, begin by entering your Social Security number and your spouse's Social Security number, if applicable. You will then fill in your full name, your spouse's name and your current mailing address.c  

Under this section, you will need to enter the amount of your federal adjusted gross income. You can find this amount on your federal tax return near the bottom of page 1 on Form 1040. Then you will choose your residency status based on how long you lived in North Carolina during the past year.c  

Enter the amount of your taxable income from your federal tax return. The North Carolina return will tell you where you can find this information on your 1040. From here, you will work through the rest of the form, applying any credits or deductions that you qualify for. After you deduct all suitable credits, you will be left with your total taxable income for the state of North Carolina.c 

At this point, you will need to consult the tax tables located in the instructions for Form D-400. After you locate your particular income bracket, you will enter the amount of your assessed tax. Subtract this from the total of taxes you paid in or had withheld from your wages to figure your refund or balance due.c 

To submit your form, you can file it by mail if you choose. Be sure to include payment for any tax balance you may have. If you file by mail, your return must be postmarked by April 18, 2011. If you prefer electronic filing, you may qualify to do so for free if you meet certain income limits. If you don't qualify for free e-filing, you can still file electronically for a fee by using tax software or a tax professional.c