Yes. North Carolina allows you to claim North Carolina itemized deductions even if you claimed the standard deduction on your federal return. North Carolina's itemized deduction rules differ from the federal rules, so your allowable North Carolina itemized deductions may not match the amount shown on your federal Schedule A.
To determine your North Carolina itemized deductions, first complete the Itemized Deductions section of your federal return. Even if you ultimately claim the federal standard deduction, entering your itemized deduction information allows the software to calculate your North Carolina itemized deductions correctly. The program will automatically apply the deduction that provides the greater tax benefit to your NC state return based on your federal entries.
Repayment of Claim of Right Income
You may qualify for a deduction on your North Carolina return if you repaid income that was included in your federal adjusted gross income (AGI) in a prior tax year because you reasonably believed you had an unrestricted right to receive the income. The deduction is allowed only to the extent the repayment was not already deducted in calculating your 2025 federal AGI.
- If the amount repaid is more than $3,000, your deduction is generally equal to the amount repaid.
- If you claimed federal itemized deductions on your 2025 federal return, enter the amount reported on Schedule A, Line 16.
- If the amount repaid is $3,000 or less, use the applicable worksheet here to calculate your allowable deduction.
If you repaid income that was taxed in a prior year, review your North Carolina Itemized Deductions section carefully and retain documentation supporting the repayment.
Program Entry
To make the manual entry for Repayment of Claim of Right Income on your North Carolina return:
- Select State
- Select Edit (three dots)
- Select Itemized Deductions
What else do I need to know?
If you are Married Filing Separately, both spouses must generally use the same deduction method (standard deduction or itemized deductions) unless they lived apart for the entire tax year.