North Carolina elected not to conform to the federal exclusion of unemployment income for tax year 2020.
Note: Please keep in mind that this unemployment exclusion is for 2020 tax year only. It does not apply to current year returns.
What if I already filed before the federal exclusion?
If you already filed with unemployment income included on return, you do not need to take any additional action with respect to the North Carolina return.
What if I filed my state return with the unemployment income excluded on the federal return?
If you filed your return and the unemployment income was excluded on the state return, the unemployment income must be added back to the return.
What if I didn't file your yet and the unemployment is being excluded from the federal return?
If you have not yet filed, you will need to add back the amount of unemployment compensation excluded from the federal taxable income.
How do I add the unemployment back to my state return?
This is automatically added back to the Resident return.
What if North Carolina conforms to the unemployment exclusion at a later date?
An amended form D-400 will be required to request a refund for taxes paid on the unemployment income.