Does TurboTax account for Public Service Loan Forgiveness when determining AGI for North Carolina?

Yes.  NC conforms to Federal Law with respect to Public Service Loan Forgiveness.  So if the Public Service loan forgiveness was excluded from federal AGI then it is excluded from NC taxable income as NC begins with federal AGI to calculate NC AGI. TurboTax automatically transfers Federal AGI to the NC forms and so the income would not be on NC forms.

NOTE:  NC does not comply with the federal changes that excluded student loan forgiveness for other than death, total and permanent disability and Public Service.  In those cases the taxpayer should add back the student loan forgiveness amount to NC income.  

1. Revisit the NC state interview, 
2. "Update" the "Income" section  
3. "Start/revisit" the "Discharge of certain Student Loans" topic to add the income back.