Also the new tax withholding requirement does not affect the payments of salaries and wages made to University faculty, staff, student, and temporary employees. The new requirement does affect payments made to independent contractors, partnerships, corporations, and other businesses. Payments for personal services are currently processed several ways. The Accounts Payable department will review the disbursements made using these various methods and ensure that the new tax withholding and reporting requirements are followed. Non-wage compensation payments for personal services performed in NC are subject to the withholding requirement.
Withholding is required only if compensation is for services performed in North Carolina.
The effective date depends on the type of personal services being provided. Payments to ordained or licensed members of the clergy are not subject to withholding. A certificate of authority does not apply to partnerships. Tax reporting for funds of affiliated organizations will be the responsibility of the affiliated organization. Tax reporting for funds of affiliated organizations will be the responsibility of the affiliated organization.