PAGE TWO -STATE INCOME TAX FACTS- North Carolina Individual Tax Changes (This is one in a series of three articles prepared by the Commit tee on State Taxation, North Carolina Association of Certified ■SCyjyr-fo . < Public Accountants, in co-opera lion with the North Carolina De- wsjsy parlment of Revenue.) ARTICLE 111 STATE TAX RETURNS REQUIRED FROM MORE INDIVIDUALS The 1957 General Assembly made a number of changes in the North Carolina individual income tax law, with most of the changes bringing State law into line with Federal law. The preceding two articles dealt with the major changes made in the reporting of income and allowable deductions. This article deals with the new filing requirements, changes in personal exemptions, and the new system of tax credits for those in dividuals having income in both North Carolina and in some other state. The provisions discussed are ef fective for the calendar year 1957. WHO IS REQUIRED TO FILE AN INCOME TAX RETURN? Under the old law, North Caro lina required an income tax return from every individual whose “net income” exceeded his personal ex emption and also from a self-em ployed or professional individual whose “gross income” exceeded $5,000. Effective this year, North Carolina requires an income tax return from every individual whose “gross income” exceeds his per sonal exemption, not counting addi tional exemptions for dependents. Regardless of the nature of bis income or his deductions or de pendents, a married man living with his wife is now required to file an income tax return if he an income tax return if he has gross income in excess of $2,000; and a- single person or married woman is required to file a return if he or she has gross income in excess of SI,OOO. If this test is met, a return is required even though no tax is due. PERSONAL EXEMPTION CHANGES (1) Married Women Head of Household Since 1953, a married woman furnishing the major support for herself and her husband has been allowed to claim the head of house hold exemption of $2,000, provided L her husband had gross income dur ing the year of less than SSOO. The 1957 General Assembly increased to SI,OOO the amount of gross in come which the husband may have and his wife still be permitted to claim the head of household ex emption. (2) Depedent Children of Divorced Parents Under the 1957 Revenue Act, a divorced parent furnishing the ma-» jor support of a child of a former marriage may claim the S3OO per sonal exemption for the child, even though he or she did not have cus tody of the child during the "year. (3) Right to Exemptions Under old law, the status on the last day of the year determined the right to exemptions in all cases except where a spouse or depen dent died during the year. Under new law, the status during the major part of the year determines HEADQUARTERS FOR CAROLINIANS WHEN IN NORFOLK FAIRFAX HOTEL FIREPROOF RATES $3.50 UP TELEVISION RADIO AIR-CONDITIONED seagratns Grown Mv / Hfe / '** v "*** i / tUOMH-WSTIUUS COMMIT, KW YOIK CUT. IUHOU WHISKY. M rtOOf. 06% OUMIUITML SPIRITS. the right to dependency and head of-household exemptions. Now, a parent furnishing the major part of the support of a child during the income year may claim the child as a dependent for that year, even though the exemption status of the dependent has changed before the last day of the year. In the case of individuals sep arated during the year, the indi vidual who was the head of house hold is entitled to that exemption for that year, provided his or her status was unchanged for the ma jor part of such income year. An individual is still entitled to the exemption for his spouse or dependent who died during the year. t The new law permits a taxpayer to qualify as a “head of household” if he maintains a household for a dependent whether in North Caro lina or not. Previously, the house hold was required to be maintained in this state. TAX CREDITS ALLOWED RESIDENTS AND NON-RESIDENTS (1) Residents of North Carolina Under prior law, residents of North Carolina who were required to pay an income tax in other states were permitted to deduct the income so taxed under certain circumstances. The new law no longer permits , a North Carolina resident to de duct income taxed in another state | but allows him to claim a credit I against his North Carolina income tax if (1) the income taxed in the other state was derived from 1 sources within that state and was taxable there without regard to j the residence or domicile of the taxpayer, and (2) that state would ■ not allow him a credit for income taxes paid to North Carolina. The credit allowed to the North Caro lina resident is the lower of (1) the amount of income tax paid to the other state on income report able to North Carolina, and (2) the total North Carolina income tax multiplied by the fraction of the gross income reportable to North Carolina which is subject to tax in the other state. For example, if a North Carolina resident earned two-thirds of his income in North Carolina and one third in Georgia and is taxed by Georgia on the one-third earned there, he may deduct from his North Carolina tax the lower of the tax actually paid Georgia or one-third of the tax due North Carolina on his total income. (2) Non-Residents Non-residents of North Carolina whose states of residence permit tax credits to North Carolinians earning income in those states may now deduct from their North Carolina income tax the amount of income tax paid to their state "'of residence on income derived from sources in and taxable to North Carolina regardless of the source of the North Carolina income. Un der prior law, the tax credit did not apply to the tax on income from an established unincorporated RODANTHE PERSONALS Outer Banks Rebekahs met Feb ruary 14th, 13 present. Hostesses: Mrs. Lurania Midgett and Mrs. Lucretia Midgett. Rodanthe, Waves, Salvo Home Club met Monday last week with Mrs. Margaret Watson. Attending were the Home Agent, Miss Fran Alexander, Mrs. Nora E. Herbert, president; Mrs. Margaret Watson, Mrs. Bethany Gray, Mrs. Lurania Midgett, Mrs. Bettie Midgett, Mrs. Esta Grey, Mrs. Elizabeth Gray, Mrs. Ella Midgett, Mrs. Mellie Edwards, Mi's. Sulie Paynre, Ale thia Meekins. Singing of “On Top of Old Smoky.” Mrs. J. E. Herbert led the devotion, reading the 23rd Psalm. Reading of the minutes by the Secretary, Mrs. Bettie Midgett. A demonstration was given on pie making and meringue for pie by Mrs. Margaret Watson, Mrs. Bet tie Midgett and Mrs. Nora E. Her bert. The hostesses were Mrs. Mar garet Watson and Mrs. Bettie Mid gett. The meeting closed to meet again at the regular time. Mr. and Mrs. John E. Herbert Sr., spent Monday night with Mr. and Mrs. Dameron M. Payne and Miss Elva Payne in Wanchese. Mr. and Mrs. Julian L. Gray and daughter, Sheila,- spent Satur day night with Mr. and Mrs. Dewey Hayman and Mrs. Eliza Gould at Arlington Hotel, Nags Head. Mr. and Mrs. Herbert K. Midgett Sr. left here Sunday to meet their son, Herbert, Jr., in Norfolk, who has spent several months at the South Pole. • Mr. and Mrs. Jack W. Cahoon and son, Jack Jr., spent Saturday night with Mr. Cahoon’s parents, Sheriff and Mrs. Frank Cahoon in Manteo. Mrs. Lurania Midgett returned Monday after visiting her sister, Mrs. Eliza Gould, at Nags Head. Mr. and Mrs. Fred O’Neal re turned Thuisday from Norfolk. Mrs. E. R. Midgett, who has been in the U. S. Public Health Service Hospital for treatment with a broken ankle, is home and improving. D. B. Midgett, Jr., U.S.C.G., sta tion in Norfolk, spent the week end here with his mother. Johnnie Beck, U.S.C.G., station ed in Norfolk, spent the week end here with his grandparents, Mr. and Mrs. Leve W. Midgett and family. Mr. and Mrs. Donald Jodd have returned after a visit to their old home in Pittsburgh, Penn. business in North Carolina. (3) General In order to receive the tax credit, the taxpayer must furnish a tree copy of the return made to the other state and substantiation of the amount of tax paid. The North Carolina Revenue Department has prepared a “Reci procity Memorandum” which sets forth the extent to which recipro city of tax credits is practiced by North Carolina with other states. This memorandum is available upon request to the North Carolina Revenue Department, Individual Income Tax Division, Raleigh. ENGELHARD PERSONALS Lt. and Mrs. Wm. Burrus of Camp Rucker, Ala. are visiting her mother, Mrs. Jabin Berry. Mr. and Mrs. Thos. E. Spencer and son Tommy of Washington spent the week end here. Tracey Gibbs has returned to Norfolk after a visit with his par ents, Mi-, and Mrs. Durwood Gihbs. Mr. and Mrs. James Emory Mid yette spent Sunday in Creswell. Earl Spencer of Plymouth spent the week end at home. Mr. and Mrs. Glenn Jarvis and children of Cocoa, Fla., who were called to Swan Quarter due to the death of her father. Whitfield Wil liams, visited relatives here dur ing the week Rev. and Mrs. L-'mar Wheeler and son Wayne of Fairfield spent Sunday here and Mr. Wheeler fill ed his appointment at the local ] Baptist Church. Miss Alice Fay Etheridge, who teaches school in Virginia, spent the week end with her parents, Mr. and Mrs. T. J. Etheridge. MANY BOAT LAUNCHING RAMPS ON DARE COAST In addition to major harbor im provements for the reception of small craft and yachts that have been completed in Manteo, at Wan chese, Manns Harbor, and commu nities of Hatteras Island, the coast of Dare this year will offer more landing facilities for mgtor boats than ever before. • j, Just about every community from Kitty Hawk and Duck south ward to Hatteras and westward to East Lake and Mann? Harbor have landing ramp facilities for small boats this year. Many of the facili ties have been completed since the summer season of 1957. Complete information about tlje ramp facilities for small boats and! also harbor improvements for thej reception of yachts and larger craft in the various Dare Coast communities is now being compiled by the Dire Countv Tourist Bu reau. This information will be in cluded in an up-to-date sportsfish ing bulletin for 1968 that will soon be published. ft ‘ THE COASTLAND TIMES, MANTEO, N. C. You can't see a || crippled heart *« She doesn’t use crutches— but she has a crippled heart. She is one of 500,000 chil dren with damaged hearts who look to medical research * for a brighter tomorrow. You support research and help all hearts—when you give to the Heart Fund. uftit f « n