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May 12, 2021
Question

NC adjustments to income

  • May 12, 2021
  • 2 replies
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Where does NC input forms allow you to make Adjustments to taxable NC income?  I have interest from Federal obligations and interest from NC municipalities that needs to be deducted from federal AGI to arrive at NC total income.  

    2 replies

    SteamTrain
    Employee
    May 12, 2021

    1)   You make virtually all adjustments when you enter the 1099-DIV and 1099-INT forms in the Federal section....and then those amounts transfer to the State section automatically for subtraction.  Both the 1099-INT and -DIV form entries allow further information about those two types of items to be entered in the Federal section....and that transfers to the state forms.

     

    2) The state section where they subtract...is in part B of the D400 Sch S 

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    3)  The only thing you should have trouble with is declaring an interest deduction for NC income on certain US "Agency" bonds you might hold as individual bonds.....like TVA: Tennessee Valley Authority, FFCB: Federal Farm Credit Bank, FHLB: Federal Home Loan Bank, FICO: Financing Corp. , REFCORP: Resolution Funding Corp bonds.  I haven't seen how to do those this year yet...prior years there was a way in the NC interview, but I don't see it right now.

    ____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
    SteamTrain
    Employee
    May 12, 2021

    @GrantWebber 

     

    ........ANNNNNNND...NC-Sstate and NC-Municipal bond interest is not a subtraction from Federal income on the NC tax forms...since it isn't included in Federal income in the first place...BUT Municipal bond interest from other states is "Added" to Federal income on the NC tax return, because it is NC-taxable.

     

    This is also shown on the D400 SCH S, but in part A, line 1.     Again, the delineation of what was from NC bonds, and what was from all other states is entered in the Federal section, when you enter your 1099-DIV and 1099-INT forms there.

    ____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*