Listed below is income that North Carolina will allow you to subtract on your return:
Taxable Retirement Benefits That Qualify For The Bailey Settlement
North Carolina does not tax retirement benefits received by any retirees of the State and its local governments by the U.S. government retires (including Military), under the Supreme Court decision in Bailey v. North Carolina. The exclusion does not apply to retirement benefits that is paid to former teachers or other state employees of another state and political subdivisions.
Recognized IRC Section 1400Z-2 gain
You may subtract a 1400-Z-2 gain included in federal AGI to the extent it was included in a prior year when calculating state taxable income.
Adjustment For Bonus Depreciation Added Back In Prior Years
You deduct an amount equal to 20% of the bonus depreciation deduction that was added to your federal AGI in a prior year each year for 5 years following the original add back.
Section 179 Expense Deduction Added Back In Prior Years
You may subtract an amount equal to 20% of the section 179 expense deduction that was added to your federal AGI in a prior year each year for 5 years following the original add back.
Interest Income From US Obligations
You may enter amounts of interest received from U.S. obligations, such as notes and bonds.
Where do I enter the Subtractions from Income in my account?
To enter these subtractions on your North Carolina return, follow the steps below:
- State Section
- North Carolina Return
- Subtractions from Income