17 NCAC 06B .4003. NONRESIDENT SHAREHOLDERS

(a)  A nonresident shareholder of an S corporation takes into account only his share of the S corporation's income attributable to North Carolina in the numerator of the fraction in determining that portion of federal taxable income that is taxable to North Carolina.  If an S corporation does business in North Carolina and one or more other states, the income attributable to North Carolina is determined under G.S. 105-130.4.

(b)  A nonresident shareholder in an S corporation may claim the proportionate share of the tax paid on his behalf by the S corporation to North Carolina on his share of the S corporation income.

(c)  A nonresident shareholder in an S corporation is not required to file a North Carolina individual income tax return when the only income from North Carolina sources is his share of S corporation income and the S corporation pays the tax on his behalf.

 

History Note:        Authority G.S. 105-130.4; 105‑131.1; 105‑131.5; 105‑131.7; 105‑134.5(d); 105‑262;

Eff. June 1, 1990;

Amended Eff. June 1, 1993; October 1, 1991.