Below is a list of credits that are available on your North Carolina return:
Credit for Taxes Paid to Another State
If you are a North Carolina resident and you have income taxed by NC and another state, a tax credit may be claimed. However, no credit is allowed for taxes paid to a city, county, or other political subdivision in another state.
Note: Nonresidents are not entitled to this tax credit.
The program will automatically calculate this credit for your Resident North Carolina return when you add your Nonresident return to your account. If you have a Part-Year North Carolina return, you will be required to enter the information asked of you within your account.
Rehabilitating An Income Producing Historic Structure
The credits can't be claimed against the cost of acquisition, new additions, site work, or personal property. Generally, costs incurred for rehabilitating the existing structure will qualify as rehabilitation expenses.
Property owners must begin claiming the tax credit(s) in the year the building is placed into service. The federal tax credits must be claimed over a period of five years, minimum, and may be applied to tax returns one year before, and up to twenty years after, the building is placed into service.
The state tax credits may be claimed entirely the year the structure is placed in service, or carried forward up to nine years
Rehabilitating A Non-Income Producing Historic Structure
The credits cannot be claimed against the cost of acquisition, new additions (volume increase), site work, or personal property. Generally, costs incurred for rehabilitating the existing structure will qualify as rehabilitation expenses.
The tax credits(s) must be claimed within the year the structure is placed in service. Any unused credits from year one may be carried forward to for the following nine years.
Credits may be transferred with property so long as transfer of property occurs before the structure is placed in service.
Rehabilitating An Income Producing Historic Mill Facility
You can enter the amount of qualified rehabilitation expenditures with respect to an income producing historic mill facility that was placed in service during the tax year. Important: Enter the amount of qualifying expenditures only within the first year the credit is taken.
Rehabilitating A Non-Income Producing Historic Mill Facility
You can enter the amount of qualified rehabilitation expenses with respect to a nonincome producing historic mill facility that was placed in service during the tax year. Important: Enter the amount of qualifying expenditures only within the first year the credit is taken.
Also enter the installment amount for the current year. This credit is taken in 5 equal installment amounts, beginning with the year the property was placed in service.
Credit For Income/Non-Income Producing Historic Structure Article 3L
The 2015 General Assembly has enacted Article 3L to replace the historically rehabilitation tax credits generally available under Article 3D of Chapter 105 which expired for qualified rehabilitation expenditures and rehabilitation expenses incurred on or after January 1, 2015. Article 3L credits are very similar to the former 3D tax credits; however, 3L credits are capped and have a new low credit percentage.
3L tax credits that became effective on January 1, 2016, and apply to the qualified rehabilitation expenditures and rehabilitation expense incurred on or after that date. 3L is set to expire for expenses that you do incur on or after January 1, 2024
An income producing historic structure (Article 3L) – Generally a taxpayer that is eligible for a federal income tax credit below Section 47 of the Internal Revenue Code for making rehabilitation expenditures as the certified historic structure located in North Carolina is allowed a credit equal to the sum of the following:
- 15% of expenses between $0 to $10 million
- 10% of expenses between $10 million to $20 million
Tax Credits Carried Over From A Previous Year
Enter the credit amounts from a previous year that are being carried forward.
Business Incentive And Energy Tax Credits NC 478 Forms
Credits reported on Form NC-478 are limited to 50% of your North Carolina tax. Before entering an amount here, save your state return, go to summary and create the PDF of your NC return. Enter up to 1/2 of the NC tax reported on line 15 of Form D-400.
Where do I enter my Credits in my account?
To enter these credits on your North Carolina return, follow the steps below:
- State Section
- North Carolina Return
For more information on these credits, please click here.