Category: North Carolina
North Carolina Additions to Federal Adjusted Gross Income
Domestic Production Activities Deduction - North Carolina does not allow a deduction for the domestice production activities. Enter the amount claimed on your federal Form 1040 Line 35 to add this back to your North Carolina Income.
Net Operating Losses - If you included a Net Operating Loss to your current Federal tax return and still have an amount to carryforward to next year, enter the carryforward amount.
EXAMPLE: You incur a net operating loss (NOL) $75000 in 2011. You carry the full NOL to your 2012 federal tax return but still have a leftover balance of $25,000 to carryforward to your 2013 tax return, you must enter the $25,000 carryforward amount here to accurately calculate 2012 North Carolina taxable income.
Federal Form 8814, Child's Interest/Dividend Earnings - If you qualified and elected to report your child's uneared iuncome on your federal return, you must enter the difference of the excluded amount (up to $1900) minus the child's standard deduction ($500) to calculate your North Carolina taxable income
EXAMPLE: Susan, age 10, received $2000 in interest income in 2012. She had no other income. Her parents include $100 ($2000-1900) of her income in their federal adjsuted gross income. In figuring their North Carolina taxalbe income, Susan's parents must enter $1400 ($1900-500).
Exclusion of Lump-Sum Dsitribution from a Retirement Plan - If you elected to exclude a lump-sum distribution from a retirement plan for you regular federal income tax computation AND computed the tax separately, enter the amount of the excluded lump sum.
Built-in Gains Tax for S-Corporations - If you are a sharehold in an S-Corporation that paid built-in gains tax for federal income tax purposes, enter your share of the built-in gains tax that the S-Corporation paid.
Distributions from North Carolina's National College Savings Program - If you withdrew an amount (for purposes other than qualified higher education expenses) that you contributed to North Carolina's National College Savings Program AND deducted that amount in a prior year, you must enter the amount withdrawn to accurately calculate your North Carolina taxable income.