NC-429B PTE: Underpayment of Estimated Tax by Taxed Pass-Through Entities (2025)
North Carolina · North Carolina DOR · Used for tax years 2025
North Carolina Form NC-429B PTE helps taxed S corporations and taxed partnerships determine whether they owe interest on underpaid estimated tax for 2025 and calculate the amount. It calculates underpayments and interest separately for each installment. Keep the completed form fo
Who files this form
Taxed S Corporations and Taxed Partnerships use Form NC-429B PTE to determine whether they owe interest on underpaid estimated tax and to calculate that interest. Keep the form for your records rather than attaching it to the tax return.
A Taxed PTE generally must make estimated payments if it reasonably expects North Carolina income tax liability of $500 or more after tax credits. Estimated payments are not required if its tax year is less than four months.
Generally, interest applies if tax due is $500 or more and the entity did not timely pay at least the smaller of:
- 90% of the income tax due on its 2025 Taxed PTE return.
- 100% of the income tax due on its 2024 Taxed PTE return.
Important exceptions:
- If the entity did not elect to be a North Carolina Taxed PTE in the preceding tax year, it is not subject to this interest.
- If 90% of the 2025 net tax due is less than $500, Line 4 says not to complete the form because no underpayment interest is owed.
When it's due
For the 2025 tax year, Line 7 lists estimated-tax installment due dates as the 15th day of the 4th, 6th, 9th, and 12th months of the entity’s tax year.
For the 2025 underpayment calculation, Line 16 uses the payment date or the 15th day of the 4th month after the tax year closes, whichever is earlier, as the end date for calculating interest.
What you'll need
Have these records and details available:
- The entity’s legal name, federal employer ID number, and tax-year dates.
- 2025 Form CD-401S, Schedule B, Lines 19 and 20e, or 2025 Form D-403, Part 1, Lines 11 and 12, for income tax and credits.
- 2024 Form CD-401S, Schedule B, Line 19 minus Line 20e, or 2024 Form D-403, Part 1, Line 13, for prior-year net tax due.
- Amounts and dates of estimated-tax payments, payments by partnerships on the entity’s behalf, and nonresident withholding.
- A schedule showing the computations if using the annualized income installment method. Line 8 says to attach this schedule, and the instructions say to retain the computations for future reference.
For the interest rate used in Part 2, the form directs you to ncdor.gov and says to search for “interest rate.”
How to file
Do not attach Form NC-429B PTE to the Taxed PTE’s tax return. Retain it for your records. The text gives no mailing address or e-filing instructions for this form.
Complete Part 1 to check for underpayments in each payment period. If Line 12 shows an underpayment, complete Part 2 to calculate interest separately for each installment.
Enter the Line 22 total on either:
- Form CD-401S, Schedule B, Line 27.
- Form D-403, Part 1, Line 21c.
Common mistakes
- Attaching the form to the tax return: Keep it for your records instead.
- Moving across columns too soon: For Lines 10–13, complete one column before starting the next.
- Leaving out annualized-income computations: If using this method, attach the computation schedule to the form and retain your calculations.
- Using the wrong ink or punctuation on handwritten forms: Use blue or black ink, not red. Do not use dollar signs, commas, or other punctuation marks in entries.
- Using incorrect print settings: Set page scaling to “none,” uncheck Auto-Rotate and Center, and do not print on both sides.
Questions people ask
Can the entity owe interest even if it receives a refund?
Yes. Interest is calculated separately for each installment due date. Paying enough later does not necessarily eliminate interest for an earlier underpayment, even if the return shows a refund.
Can annualizing income reduce the interest?
Yes. The annualized income installment method may reduce or eliminate underpayment interest. Enter the computed installments on Line 8 and attach a schedule showing the calculations.
How are later estimated-tax payments applied?
A payment is applied first to any previous underpayment of a required installment, regardless of which installment the payment was intended to cover. If more than one payment is made for a required installment, make separate computations for each payment.
Where can I find the interest rate?
The Secretary of Revenue sets the rate semiannually. The form directs you to visit ncdor.gov and search for “interest rate.”