Nonresident Shareholders

# (a)

A nonresident shareholder of an S corporation shall take into account only his or her share of the S corporation's income attributable to North Carolina in the numerator of the fraction in determining that portion of adjusted gross 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 shall be determined under G.S. 105-130.4.

# (b)

A nonresident shareholder in an S corporation may claim credit on the shareholder's North Carolina individual income tax return for the tax paid on his or her behalf by the S corporation to North Carolina on his or her share of the S corporation income.

# (c)

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

Last amended: Authority G.S. 105-130.4; 105-131.1; 105-131.5; 105-131.7; 105-153.4(d); 105-262; Eff. June 1, 1990; Amended Eff. June 1, 1993; October 1, 1991; Readopted Eff. May 1, 2016.

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