What deductions and adjustments were updated?
- For tax year 2021, taxpayers are not required to add the amount of their expenses paid with forgiven PPP loan proceeds to their federal AGI.
- The North Carolina General Assembly enacted legislation in 2021 that exempts military retirement benefits from North Carolina tax for certain individuals.
Itemized Deductions
- North Carolina does not allow qualified contribution deductions up to 100% of Federal Adjusted Gross Income. You may only deduct qualified contributions of up to 60% of Federal Adjusted Gross Income.
- North Carolina now allows deductions of medical and dental expenses that exceed 7.5% of Federal Adjusted Gross Income.