How do I claim the North Carolina credit for taxes paid to another state?

The credit for taxes paid to another state is automatically calculated when you add a Nonresident return to your account and have both a North Carolina resident return and income taxed by both states.

No credit is allowed for income taxes paid to a city, county, or other political subdivision of a state or country, or to the federal government. Nonresidents are not entitled to this tax credit.

Part-Year Residents

If you have a Part-Year Resident North Carolina return, the credit is not calculated automatically. You must complete the required information in the North Carolina Credits section. To enter the credit, refer to a copy of the other state's tax return and use the tax liability and taxable income information requested by the program.

Part-year residents may claim this credit only when the North Carolina return and the other state's return cover the same time period and the same income is taxed by both states.

North Carolina may request a copy of the other state's tax return before processing your return. Please visit the North Carolina Department of Revenue website here for additional information and documentation requirements.

Program Entry

If you qualify for the credit for taxes paid to another state and are filing a Part-Year Resident North Carolina return, you must enter the credit information manually by following these steps:

1. State
2. Edit North Carolina using the three dots
3. Select Credits.
4. Choose Credit for Taxes Paid to Another State or Country.
5. Enter the required information from the other state's tax return.

Note: Repeat these steps for each state for which you are claiming the credit.