THIS BOOKLET CONTAINS INSTRUCTIONS FOR
FORMS D-400, D-400 SCHEDULE S, D-400 SCHEDULE PN, D-400TC,
AND D-400 SCHEDULE AM FOR TAX YEAR 2019
eFile
3 Make it easy on yourself - file electronically
3 Convenient, faster, more accurate
3 Pay by bank draft (no convenience fee)
3 Direct deposit for state tax refunds
You may qualify to file for free!
Visit the Department’s website to get started.
Declaración Electrónica (EN ESPAÑOL)
North Carolina Individual Income Tax Instructions
Form D-401
www.ncdor.gov
2019
Automated Refund Inquiry Line .................................................................................................................................. 1-877-252-4052
Taxpayer Assistance and Forms................................................................................................................................. 1-877-252-3052
Tax Fraud Hotline (8:00 a.m to 5:00 p.m., Monday through Friday)
Toll Free ................................................................................................................................................................. 1-800-232-4939
Wake County .......................................................................................................................................................... 1-919-707-7597
N.C. DEPARTMENT OF REVENUE, P.O. BOX 25000, RALEIGH, NC 27640-0100
IMPORTANT TELEPHONE NUMBERS
Page 2
Want a convenient, reliable, proven method for ling
and paying your taxes? Try eFile! Over 90% of North
Carolinians take advantage of the benets of eFiling!
In This Booklet
What’s New ..............................................3
General Information ................................5
Instructions for:
Form D-400 .........................................11
Form D-400 Schedule S ..................... 16
Form D-400 Schedule PN ..................19
Form D-400TC ....................................19
Form D-400 Schedule AM .................. 21
Consumer Use Tax ................................ 24
What you should send us...
• Your North Carolina income tax return
(Form D-400).
• Federal forms W-2 and 1099 showing the
amount of North Carolina tax withheld as
reported on Form D-400, Line 20.
• Federal Form 1099-R if you claimed a Bailey
retirement deduction on Form D-400 Schedule
S, Line 10.
• Form D-400 Schedule S if you added items to
federal adjusted gross income on Form D-400,
Line 7, or you deducted items from federal
adjusted gross income on Form D-400, Line 9.
• Form D-400 Schedule S if you deducted N.C.
itemized deductions on Form D-400, Line 11.
• Form D-400 Schedule PN if you entered a
taxable percentage on Form D-400, Line 13.
• Form D-400TC and, if applicable, Form NC-478
and Form NC-Rehab if you claimed a tax credit
on Form D-400, Line 16.
• A copy of the tax return you led in another state
or country if you claimed a tax credit for tax paid
to another state or country on Form D-400TC,
Line 7a.
• A copy of your federal tax return unless your
federal return reects a North Carolina address
or you led electronically.
• Other required North Carolina forms or
supporting schedules. (Do not send copies
of completed worksheets from the instruction
booklet or other unnecessary attachments.)
• A check or money order payable to the “North
Carolina Department of Revenue,” if you have
a tax due on Form D-400, Line 27. Include a
payment voucher, Form D-400V or D-400V
Amended, available from the Department’s
website.
Important: The Department will not accept a
check, money order, or cashier’s check unless
it is drawn on a U.S. (domestic) bank and the
funds are payable in U.S. dollars.
With eFile, you can le your state
and federal income tax returns at the
same time, and, if you owe tax, pay by
bank draft with no convenience fee.
• Visit www.ncdor.gov to access eFile for Free - over 70% of
North Carolinians qualify (IRS estimate). Certain eligibility
requirements apply.
• If you don’t qualify to eFile for Free, visit www.ncdor.gov to
access NCDOR-approved software provider lists or choose a
tax professional to eFile for you.
• Get free tax help through Volunteer Income Tax Assistance
(VITA) or Tax Counseling for the Elderly (TCE) - visit www.irs.
gov or call 1-800-829-1040. Certain eligibility requirements
apply.
• Software prices, software features, and tax professional fees
vary. Choose the one that meets your needs.
• eFile Advantages
- File current, amended, and prior year returns.
- Make or schedule payments – up to the due date of the tax,
estimates up to 12 months out, extensions up to 6 months
out.
- Get conrmation by email when your forms and payments
are received.
- Choose direct deposit for your state individual income tax
refund.
Make your tax payments electronically - it’s easy.
Visit www.ncdor.gov and select a File and Pay option. Pay
by bank draft (no convenience fee), or MasterCard or Visa
(convenience fee).
Future Developments
For the latest information about developments affecting Form D-400 or the
instructions, such as legislation enacted after the publication of the tax forms,
visit the Department’s website.
Follow Us
Page 3
What’s New for 2019?
•
North Carolina Individual Income Tax Extension
Effective January 1, 2019, state law permits an automatic extension to le your North Carolina income tax return if you certify that
you were granted an automatic extension to le your federal income tax return. (For more information on how to get an extension,
see Page 7.)
•
Veterans Benets and Transition Act
The Veterans Benets and Transition Act of 2018 (PL 115-407 signed into law December 31, 2018) amended the Servicemembers
Civil Relief Act to allow the spouse of a servicemember to elect to use the same state of residence as the servicemember for state
tax purposes. Beginning with taxable year 2018, this election can be made regardless of when or where the taxpayers were married.
(For more information on who must le a North Carolina individual income tax return, see Page 5.)
•
Form D-400 Afrmation
The afrmation statement for the D-400 and accompanying schedules and statements has been claried to state that upon signing
the return, the taxpayer is declaring and certifying that the taxpayer has examined the return and all accompanying schedules and
statements, and that they are true, correct, and complete.
•
N.C. Standard Deduction Amount Increased
The N.C. standard deduction for each ling status is increased for tax year 2019. To determine the N.C. standard deduction amount
for your ling status, see Page 13.
•
Charitable Contribution
Beginning with tax year 2019, N.C. law was changed to conform to federal law that allows a federal income tax exclusion to
taxpayers over the age of 70 1/2 that make qualied charitable distributions from an individual retirement plan. This change
eliminates the corresponding N.C. adjustments to taxable income that were previously required.
•
Change in Tax Rate
The income tax rate imposed on an individual’s North Carolina taxable income for tax years beginning on or after January 1, 2019
is reduced from 5.499% to 5.25%.
•
Form D-400 Schedule AM No Longer Year Specic
Schedule AM is no longer year specic and may be used to amend any tax period eligible to be amended under N.C. law. Taxpayers
will now be required to enter the calendar year or other tax year being amended in the appropriate elds at the top of Schedule AM.
(For more information on Form D-400 Schedule AM, see Page 21.)
•
Other 2019 Legislative Changes
For information on other legislative changes that affect tax year 2019, see the “2019 Tax Law Changes” publication available on
the Department’s website.
The Ofce of the Taxpayer Advocate is Here to Help You
What is the Ofce of the Taxpayer Advocate?
The Ofce of the Taxpayer Advocate (“OTA”) was established by the Secretary of Revenue to help ensure the Department enforces the
State’s tax laws in an impartial, consistent, secure, and efcient manner. The purpose of OTA is to instill condence and integrity in the
administration of North Carolina’s tax laws by ensuring taxpayers are afforded their rights as established in the Taxpayer’s Bill of Rights.
When a problem arises between a taxpayer and the Department that cannot be resolved through normal administrative channels,
OTA will work with the appropriate division within the Department to seek resolution of the problem and ensure that it is handled in a
professional manner.
What can the Ofce of the Taxpayer Advocate do for you?
OTA can help you resolve certain tax issues with the Department. To receive OTA assistance, one or more of the following criteria must
be met:
• You must have attempted to resolve a state tax issue(s) through the normal administrative channels. In other words, you must have
exhausted ALL administrative remedies provided by law before contacting OTA.
• A Departmental response has not been provided to you by the date promised or within the date required by law.
• You believe that instructions or information provided to you by the Department is incorrect and that the erroneous information
caused confusion or led to an unnecessary hardship.
• You have a reoccurring issue that has not been resolved through normal administrative channels.
The Ofce of the Taxpayer Advocate cannot help with:
• Issues involving a current state audit
• Provide the status of a refund request
• Stop collection activity
• Waives taxes, penalties, or interest
• Accept an offer in compromise
Taxpayers may, however, receive assistance with the above matters by calling our toll-free customer service number at 1-877-252-3052.
How can you reach us?
An eligible taxpayer may request OTA assistance by completing Form NC-TA, which is available on the Department’s website. You can
also contact the ofce at 1-919-715-2080.
Page 4
Before You Begin
Read the instructions carefully before you begin preparing your individual income tax return. Make sure that you complete
and attach the proper tax schedules to your tax return. Incomplete or inaccurate information may result in the Department
returning your tax return to you, thereby delaying the processing of your tax return and any refund due thereon.
Important: You must enter your entire nine digit social security number(s) (“SSN”) in the appropriate boxes on the
forms. An incorrect or missing SSN can increase your tax, reduce your refund, or delay your refund.
Be sure to enter your complete address on your return, including your apartment number, if applicable.
Make sure you have received all of your W-2s, 1099s, and other tax documents that you need to prepare your return.
Do not submit photocopies of the return. Submit original forms only. Do not use any prior year forms.
Use black or blue ink only. Do not use red ink or pencil.
Write your numbers clearly inside the boxes like this:
Do not use dollar signs ($), commas, decimal points, or other punctuation marks like this:
Do not use brackets to indicate negative numbers.
Negative numbers are indicated by lling in the circle next to the number. Example:
If you are completing a web-ll form on the Department’s
website, enter a minus sign to indicate a negative number. Example:
If you do not have an entry for a particular line, leave it blank. Do not enter dashes, zeros, draw lines, or other symbols
in boxes that you have no entry for that line.
Round off to the nearest whole dollar. Drop amounts under 50 cents and increase amounts from 50 cents to 99 cents
to the next whole dollar.
Use capital letters.
Print letters and numbers like this:
Fill in applicable circles completely. Example:
Each year the Department makes available several different versions of tax forms and schedules. Do not mix the different
versions. If you submit different versions for the same tax year, the Department cannot process your tax return.
Example: Do not submit a software generated Form D-400 with a web-ll Form D-400TC. Instead, submit a software
generated Form D-400 and a software generated Form D-400TC, or a web-ll Form D-400 and a web-ll Form D-400TC.
A B C D F G H I J K L M N O P Q R S T U V W X Y Z
0 1 2 3 4 5 6 7 8 9
Yes No
You should keep canceled checks, receipts, and other documentation, including a copy of your federal return, to verify any
amount entered on your tax return until the statute of limitations runs out for the return. Usually, this is three years from the
due date of the return or three years from the date the return is led, whichever is later. Lack of adequate records may result
in the disallowance of all or part of the deductions. Your canceled check, money order stub, or Departmental receipt showing
payment of tax should be kept for at least ve years from the due date of the tax return.
Maintaining Records
Any facsimile or substitute form must be approved by the Department of Revenue prior to its use. If you use computer
generated returns, the software company is responsible for requesting approval and receiving an assigned identication
number. The Department publishes a list on our website of software developers who have received approval. Photocopies
of the return are not acceptable. Returns that cannot be processed by our imaging and scanning equipment will be returned
to the taxpayer with instructions to rele on an acceptable form.
Important Notice Regarding Substitute Returns
E
Page 5
General Information
The information contained in this booklet is to be used as a guide in the preparation of the 2019 North Carolina individual income tax return
and is not intended to cover all provisions of the law. For further information on North Carolina tax law, refer to the administrative rules,
bulletins, directives, or other publications issued by the Department of Revenue.
The references to line numbers on federal income tax returns were correct at the time this booklet was published. If line
numbers have changed since publication and you are unable to determine the proper line to use when completing your North
Carolina tax return, contact the Department of Revenue at 1-877-252-3052.
Who Must File a
North Carolina
Individual Income
Tax Return?
North Carolina Residents. If you were a resident of North Carolina during tax year 2019,
you must le a North Carolina individual income tax return if your gross income for 2019
exceeds the amount shown in the Filing Requirements Chart on Page 6 for your ling
status. You were a resident of North Carolina if you were domiciled in this state at any
time during 2019 or if you resided in this state during 2019 for other than a temporary or
transitory purpose. In the absence of convincing proof to the contrary, an individual who is
present within North Carolina for more than 183 days during the taxable year is presumed
to be a resident, but the absence of an individual from the state for more than 183 days
raises no presumption that the individual is not a resident.
A resident who moves from the state during 2019 is considered a resident of North Carolina
until the individual has both established a denite domicile elsewhere and abandoned any
domicile in North Carolina. A taxpayer may have several places of abode in a year, but at
no time can an individual have more than one domicile. A mere intent or desire to make a
change in domicile is not enough; voluntary and positive action must be taken.
Part-year Resident. If you were a part-year resident of North Carolina during tax year
2019 and you received income while a resident of North Carolina, or you received income in
2019 while a nonresident that was (1) attributable to the ownership of any interest in real or
tangible personal property in North Carolina, (2) derived from a business, trade, profession,
or occupation carried on in North Carolina, or (3) derived from gambling activities in North
Carolina, and your total gross income for 2019 exceeds the amount shown in the Filing
Requirements Chart on Page 6 for your ling status, you must le a 2019 North Carolina
individual income tax return. You were a part-year resident of North Carolina if you moved
to North Carolina and became a resident of North Carolina during 2019, or you moved out
of North Carolina and became a resident of another state during 2019.
Nonresidents. If you were not a resident of North Carolina at any time during tax year
2019 but you received income in 2019 from North Carolina sources that was (1) attributable
to the ownership of any interest in real or tangible personal property in North Carolina, (2)
derived from a business, trade, profession, or occupation carried on in North Carolina, or
(3) derived from gambling activities in North Carolina, and your total gross income from
all sources both inside and outside of North Carolina exceeds the amount in the Filing
Requirements Chart on Page 6 for your ling status, you must le a 2019 North Carolina
individual income tax return.
Nonresident Alien. A nonresident alien is an alien (not a U.S. Citizen) who has not passed
the green card test or the substantial presence test (For more information on the green
card test and the substantial presence test, see federal publication 519, U.S. Tax Guide
for Aliens.) For North Carolina tax purposes, a nonresident alien may be considered a
resident, part-year resident, or nonresident. (For more information, on ling requirements
for each residency status, see above.)
Military Personnel. If you were serving in the United States Armed Forces during tax year
2019 and your legal residence was North Carolina, you must le a 2019 North Carolina
individual income tax return and North Carolina income tax should be withheld from your
pay regardless of where you may be stationed. If you were a legal resident of another
state stationed in North Carolina on military orders, you are not liable for North Carolina
income tax on your military pay. However, income that is (1) attributable to the ownership
of any interest in real or tangible personal property in North Carolina, (2) derived from
other employment, a business, or trade carried on in North Carolina, or (3) derived from
gambling activities in North Carolina is subject to North Carolina income tax.
The minimum gross income ling requirements
under North Carolina law are different from the
ling requirements under the Internal Revenue
Code because North Carolina law does not
allow the same standard deduction amount
as the Internal Revenue Code. Even if your
federal gross income was less than the amount
shown on the Filing Requirements Chart on
Page 6 for your ling status, you must le a
N.C. tax return to receive a refund if you had
N.C. income tax withheld during the year.
If you were not required to le a federal
income tax return, but your total gross income
from all sources both inside and outside of
N.C. exceeds the amount for your ling status
shown in the Filing Requirements Chart on
Page 6, you must complete a federal return
and attach it to your N.C. income tax return to
show how your federal adjusted gross income
and deductions were determined.
You and your spouse must le a joint N.C.
tax return if you le a joint federal income tax
return and both you and your spouse were
residents of N.C. or both of you had N.C.
taxable income.
If you le a joint federal return and your
spouse is a nonresident of N.C. and had no
N.C. taxable income, you may le a joint N.C.
tax return or le a N.C. tax return as married
ling separately. Once you le a joint N.C. tax
return, you cannot choose to le a separate
N.C. tax return for that year after the due
date of the return. If you choose to le the
N.C. tax return as married ling separately,
you must complete either a federal tax return
as married ling separately reporting only
your income and deductions or a schedule
showing the computation of your separate
income and deductions and attach it to your
N.C. tax return. Note: Itemized deductions of
a married couple may be claimed by a spouse
only if that spouse was obligated to pay the
items and actually paid the amount during the
year. In the case of a joint obligation (such
as mortgage interest and real estate taxes),
the deduction is allowable to the spouse who
actually paid the item.
Page 6
Filing Status
A Return is Required if Federal
Gross Income Exceeds
Single ..................................................................................................................................$ 10,000
Married - Filing Jointly.........................................................................................................$ 20,000
Married - Filing Separately
If spouse does not claim itemized deductions ............................................................... $ 10,000
If spouse claims itemized deductions ............................................................................ 0
Head of Household .............................................................................................................$ 15,000
Qualifying Widow(er)/Surviving Spouse .............................................................................$ 20,000
Nonresident alien (regardless of ling status).....................................................................$ 0
Filing Requirements Chart
What Form
Should I File?
All individuals (including part-year residents and nonresidents) required to le a North
Carolina individual income tax return must le Form D-400. In addition to Form D-400, you
may be required to complete and attach the following additional tax forms:
Form D-400 Schedule S, 2019 Supplemental Schedule. Complete this form to report
additions to (or deductions from) federal adjusted gross income or to claim North Carolina
itemized deductions. (For more information, see Page 16.)
Form D-400 Schedule PN, 2019 Part-Year Resident and Nonresident Schedule. If you
are a part-year resident or nonresident who received income from North Carolina sources
during tax year 2019, complete this form to determine the percentage of total gross income
from all sources that is subject to North Carolina tax. (For more information, see Page 19.)
Form D-400TC, 2019 Individual Income Tax Credits; Form NC-478, 2019 Summary
of Tax Credits Limited to 50% of Tax; NC-Rehab, 2019 Historic Rehabilitation Tax
Credits. Complete these forms to claim various North Carolina tax credits. (For more
information, see Page 19.)
Form D-400 Schedule AM, Amended Schedule. Complete this form if you need to
amend your North Carolina individual income tax return. Enter the calendar year or other
tax period (beginning and end dates) to be amended at the top of Form D-400 Schedule
AM. You must also ll in the circle on the top right hand corner of Form D-400. (For more
information, see Page 21.)
Military Spouses. The Servicemembers Civil Relief Act prohibits North Carolina from
taxing the income earned for services performed in North Carolina by a spouse of a
servicemember stationed in North Carolina if: (1) the servicemember is present in North
Carolina solely in compliance with military orders; (2) the spouse is in North Carolina solely
to be with the servicemember; and (3) the spouse is domiciled in the same state as the
servicemember.
The Veterans Benets and Transition Act of 2018 amended the Servicemembers Civil Relief
Act to allow the spouse of a servicemember to elect to use the same state of residence as
the servicemember for state tax purposes. Beginning with taxable year 2018, this election
can be made regardless of when or where the taxpayers were married.
The income earned for services performed in North Carolina by a spouse of a servicemember
who made the residency election under the Veterans Benets and Transition Act of 2018
is not subject to North Carolina income tax if: (1) the servicemember is present in North
Carolina serving in compliance with military orders, (2) the servicemember’s spouse is in
North Carolina solely to be with the servicemember, and (3) the active duty servicemember
maintains legal residence in a state other than North Carolina and the servicemember’s
spouse elects that same state as her legal state of residence.
If all three of the above conditions are met, an employer is not required to withhold North
Carolina tax from wages paid to the military spouse. A spouse who does not meet all of
the requirements should see the instructions for Form D-400 Schedule PN, on Page 19.
Note: Withholding from wages paid to military spouses is required if all three of the above
conditions are not met.
Page 7
When Must I File?
If you le your return on a calendar year basis, the 2019 return is due on or before April
15th, 2020. A scal year return is due on the 15th day of the 4th month following the end
of the taxable year. When the due date falls on a Saturday, Sunday, or legal holiday, the
return is due on or before the next business day. A scal year return must be led on a tax
form for the year in which the scal year begins. For example, a 2019 tax form must be
used for a scal year beginning in 2019. (For more information on timely mailing of N.C.
tax returns, see Directive TA-18-1 available on the Department’s website.)
Out of the Country. If you are out of the country on the original due date of the return,
you are granted an automatic four month extension to le your North Carolina individual
income tax return if you ll in the circle on Page 1 of Form D-400. “Out of the Country”
means you live outside the United States and Puerto Rico and your main place of work is
outside the United States and Puerto Rico, or you are in military service outside the United
States and Puerto Rico. The time for payment of the tax is also extended; however, interest
is due on any unpaid tax from the original due date of the return until the tax is paid.
Nonresident Aliens. Nonresident aliens are required to le returns at the same time they
are required to le their federal returns. (For a denition of nonresident alien, see page 5.)
Important: Any facsimile or substitute form must be approved by the Department of
Revenue prior to its use. If you use computer generated returns, the software company
is responsible for requesting approval and receiving an assigned identication number.
The Department publishes on our website a list of software developers who have
received approval. Photocopies of the return are not acceptable. Returns that cannot be
processed by the Department’s imaging and scanning equipment will be returned to
the taxpayer with instructions to rele on an acceptable form.
What is the Tax Rate?
For tax year 2019, the individual income tax rate is 5.25%. To calculate your North Carolina
tax liability, multiply your North Carolina taxable income by 5.25% (0.0525).
Can I Get an
Extension to File?
Beginning with tax year 2019, a taxpayer that receives an automatic extension to le a
federal individual income tax return will be granted an automatic state extension to le
the N.C. individual income tax return, Form D-400. In order to receive the automatic state
extension, you MUST ll in the “Federal Extension” circle on page 1 of Form D-400.
If you did not receive an automatic state extension to le your N.C. individual income tax
return, you may still request an extension of time to le your return by ling Form D-410,
Application for Extension for Filing Individual Income Tax Return, by the original due date
of the N.C. tax return. Without a valid state extension, a N.C. individual income tax return
led after the original due date is delinquent and is subject to interest and all applicable
penalties provided by law. Important: Although you aren’t required to make a payment of
the tax you estimate as due with Form D-410, an extension of time to le a state tax return
does not extend the time to pay the tax. If you don’t pay all of the taxes you owe by the
original due date, you will owe interest on the remaining balance. You may also be charged
penalties. (For more information on interest and penalties, see “Will I Owe Interest and
Penalties?” on Page 8 of these instructions or the Department’s website.)
Where Do I File?
If you are due a refund and you choose not to e-le your return, mail your North Carolina
individual income tax return to the following address:
N.C. DEPARTMENT OF REVENUE
P.O. BOX R, RALEIGH
NC 27634-0001
If you are not due a refund and you choose not to e-le your return, mail your North Carolina
individual income tax return, any payment due, and Form D-400V to the following address:
N.C. DEPARTMENT OF REVENUE
P.O. BOX 25000
RALEIGH, NC 27640-0640
Page 8
How Can I Pay?
If you owe additional tax, you can pay online by bank draft (free), or credit or debit card
using Mastercard or Visa ($2 convenience fee for every $100 paid). This online service is
accurate, secure, and convenient. For details, visit the Department’s website.
You can also pay by check or money order. Do not send cash. The Department will not
accept a check, money order, or cashier’s check unless it is drawn on a U.S. (domestic) bank
and the funds are payable in U.S. dollars. Make your check or money order payable to the
N.C. Department of Revenue for the full amount due. Write “2019 D-400” and your name,
address, and social security number on your payment. If you are ling a joint return, write
both social security numbers on your payment in the order that they appear on the return.
If you do not pay online, you must visit the Department’s website and generate a
personalized D-400V, Individual Income Tax Payment Voucher. Submit the payment
voucher with your return and payment, and mail to the following address:
N.C. DEPARTMENT OF REVENUE
P.O. BOX 25000
RALEIGH, NC 27640-0640
If you use tax software to prepare your return, be sure to include Form D-400V and payment
with your return generated by the software package. Important: If you owe additional tax
on a 2019 amended return, see “Instructions for Form D-400 Schedule AM,” on Page 21.
In addition, Form D-400V Amended should be used when making a payment for a 2019
amended return.
Will I Owe Interest
and Penalties?
Interest. If you do not pay the total amount of taxes you owe, the Department is required
to charge interest on any unpaid tax. Interest is computed at the applicable rate from
the original due date to the date of payment, whether or not you have been granted an
extension. For most taxpayers the original due date is April 15th. To obtain the current
interest rate, visit the Department’s website.
If you pay your tax after the original due date, compute the amount of interest due and
include the interest on Form D-400, Line 26c.
Interest on the Underpayment of Estimated Tax. If your North Carolina income tax
liability after tax credits and North Carolina tax withheld is $1,000 or more, you are required
to pay estimated tax. Compute interest on any underpayment of estimated income tax on
Form D-422, Underpayment of Estimated Tax by Individuals. Form D-422 is available on
the Department’s website. Interest is not due if each payment equals 25 percent (25%)
of the lesser of 90 percent (90%) (66 2/3 percent (66 2/3%) for farmers and shermen)
of the tax due on your current year’s return or 100 percent (100%) of the tax due on your
previous year’s return.
If interest on the underpayment of estimated tax is applicable, compute the amount of
interest due and include the interest on Form D-400, Line 26e. If a refund is due, subtract
the amount of the interest due from the refund.
Failure to File Penalty. Returns led after the original due date without a valid extension
are subject to a penalty of 5 percent (5%) of the net tax due for each month, or part of a
month, the return is late (maximum 25 percent (25%)). If you le your return late, include
this penalty on Form D-400, Line 26b.
Failure to Pay Penalty. Returns led after the original due date are subject to a late payment
penalty of 10 percent (10 %) of the unpaid tax. If you received a state extension to le your
N.C. individual income tax return and you paid at least 90 percent (90%) of the tax due by the
original due date, you will not be automatically penalized for late payment. If the 90 percent
(90%) rule is met, any remaining balance due, including interest, must be paid with the income
tax return on or before the extended due date to avoid the late payment penalty. If your
payment is late, calculate the amount of penalty due and include it on Form D-400, line 26b.
On an amended return, the late payment penalty will not be assessed if the amount shown
due on the amended return is paid when the return is led. A proposed assessment of
additional tax due is subject to the 10 percent (10%) late payment penalty if payment of
the tax is not received within 45 days of the date of the notice of proposed assessment.
Page 9
Other Penalties. North Carolina law provides for other penalties for negligence, ling a
frivolous return, and fraud. Criminal penalties also apply for fraud with intent to evade
or defeat the tax and for willful failure to le a return, supply information, or pay the tax.
(For more information on these penalties, see G.S. 105-236(a) or visit the Department’s
website.)
What if I Owe More than One Penalty? If you owe more than one penalty on your 2019
individual income tax return, compute the amount of each penalty owed and enter the total
amount on Form D-400, Line 26b.
Collection Assistance Fee. Any tax, penalty, and interest not paid within 60 days after a
Notice of Collection is mailed will be assessed a 20 percent (20%) collection assistance fee.
The fee does not apply if the tax debt is paid in full or an installment payment agreement
is established with the Department before the fee is assessed.
What if I am an
Innocent Spouse?
Generally, both spouses are jointly and severally liable for the full amount of tax due
on a joint return. Thus, both spouses on a married ling jointly return are generally held
responsible for all the tax due even if one spouse earned all the income or claimed improper
deductions or tax credits. However, a spouse will be allowed relief from a joint state income
tax liability if the spouse qualies for federal innocent spouse relief under Internal Revenue
Code section 6015. (For more information on when a spouse may be relieved of a federal
tax liability, see federal publication 971, Innocent Spouse Relief.)
Do I Need to Pay
Estimated Income
Tax?
You are required to pay estimated income tax if the tax shown due on your return, reduced
by your North Carolina tax withheld and allowable tax credits, is $1,000 or more regardless
of the amount of income you have that is not subject to withholding. Each payment of
estimated tax must be accompanied by Form NC-40, North Carolina Individual Estimated
Income Tax. You can also pay your estimated tax online. (For more information, visit the
Department’s website.)
You should prepare your estimated tax carefully, both to avoid having to pay a large amount
of tax when you le your return, and to avoid owing interest for underpayment of estimated
income tax. Payment of estimated tax does not relieve you of your responsibility for ling
a return if one is due.
What is a Refund
Setoff?
If you owe another state or local agency, the amount you owe may be deducted from
your refund. If you have an outstanding federal income tax liability, the Internal Revenue
Service may claim your North Carolina refund. Note: The application of a refund against
debts owed to state agencies, local agencies, or the Internal Revenue Service is not
subject to Departmental review.
Need to Call Us
About Your Refund?
You can check the status of your refund at the Department’s website. The automated
refund inquiry line 1-877-252-4052 (toll-free) will also give you the status of your current
refund. You can also obtain amended return refund information. Service is available 24
hours a day, seven days a week. You will need the rst social security number and the
amount of refund shown on your return when you call.
What is the Statute
of Limitations for
Refunds?
Generally, to receive a refund, your return must be led within three years from the date the
return was due or within two years after the tax was paid, whichever date is later. However,
special rules extending the time for ling refund claims beyond the normal three year
statute of limitations apply to overpayments attributable to (1) federal determinations, (2)
worthless debts or securities, (3) capital loss carrybacks, (4) net operating loss carrybacks,
or (5) a contingent event. (For more information on the statute of limitations for refunds, see
G.S. 105-241.6 or visit the Department’s website.)
Page 10
What are My Rights
as a North Carolina
Taxpayer?
As a taxpayer, you are always entitled to fair, professional, and courteous services. The
Department’s goal is to apply the laws of North Carolina consistently and fairly so that
your rights are protected and that you pay only your fair share of North Carolina tax. It is
your right to have information about your tax history, nancial situation, and assessment or
reviews kept in strict condence. Any return information, correspondence, or Departmental
discussion concerning your tax situation is condential. Employees or former employees
who violate this condentiality are subject to criminal prosecution and possible nes. An
employee who willfully discloses tax information is also subject to dismissal.
The Department routinely examines returns to ensure taxpayers comply with tax statutes. If
the Department examines your return, the Department may ask you to provide information
to verify items on your return. You are entitled to a fair examination and an explanation of
any changes the Department proposes to your return.
If you object to a proposed denial of refund or a proposed notice of tax assessment
(collectively, “proposed action”), you may request a Departmental review of the proposed
action by timely ling a request for Departmental review within 45 days of the date the
notice was mailed or delivered to you. A request for Departmental review led within 45
days of the date the notice was mailed or delivered to you is considered timely led. If a
request for a Departmental review is not timely led, the proposed action is nal and is not
subject to further administrative or judicial review. An assessment for an amount shown
due on a return but not paid, or the application of a refund against debts owed to state
agencies, local agencies, or the Internal Revenue Service is not subject to Departmental
review. To obtain a copy of the North Carolina Bill of Rights, visit the Department’s website.
Generally, an amended return on which you owe additional tax is required to be led and
the tax paid within three years after the date you led your return or within three years from
the date required by law for ling the return, whichever is later.
If the Internal Revenue Service makes changes to an individual’s federal return, the
individual must report the changes to the state by ling an amended return within six months
from the date the report from the Internal Revenue Service is received. If an individual does
not amend the state return to reect the federal changes and the Department of Revenue
receives the report from the Internal Revenue Service, an assessment may be made by
the Department within three years from the date of receipt of the report, and the individual’s
right to any refund which might have been due by reason of the change is forfeited.
In addition, if an individual voluntarily les an amended federal return that increases the
amount of state tax payable, the individual must le an amended North Carolina return
within six months of ling the amended federal return. If the amended federal return
contains an adjustment that would decrease the amount of state tax payable, the individual
may le an amended North Carolina return within the general statute of limitations for
obtaining a refund. If an individual does not amend the state return to report the federal
changes, an assessment may be made by the Department within three years after the
date the federal amended return was led with the Internal Revenue Service, and the
individual’s rights to any refund which might have been due by reason of the amended
return is forfeited.
For more information on how to amend your 2019 North Carolina individual income tax
return, see “Instructions for Form D-400 Schedule AM” on Page 21. (For more information
on federal determinations and amended returns, see G.S. 105-159, G.S. 241.8, or visit the
Department’s website.)
When Must I File an
Amended Return?
Page 11
If you are lling out Form D-400 by hand, please use black or
blue ink only. Do not use red ink or pencil. Print your letters and
numbers neatly. If you do not have an entry for a particular line,
leave it blank. Do not use dashes, zeros or other symbols to
indicate that you have no entry for that line. (For more information
on how to avoid common mistakes when ling your return, see
“Before you Begin” on page 4.)
Name, Address, and Social Security Number. Enter your
name, address, and social security number in the spaces
provided. If you are married ling jointly, enter your spouse’s
name and social security number in the designated space. If you
are married ling separately, provide your spouse’s name and
social security number on Line 3. Important: Be sure to enter
your entire nine digit social security number(s) in the appropriate
boxes. Disclosing your social security number on your tax return is
required under Administrative Rule 17 NCAC 06B.104. Moreover,
an incorrect or missing social security number can increase your
tax, reduce your refund, or delay your refund.
County. Enter the rst 5 letters of the county in which you
resided on the last day of 2019. Your county of residence may
be different than the county of your mailing address.
N.C. Education Endowment Fund Contribution. You may
elect to contribute to the N.C. Education Endowment Fund by
making a contribution to the fund. To make a contribution, simply
enclose Form NC-EDU and your payment with your Form D-400.
If you owe additional income tax on your return and would like
to make a contribution to the fund, you may write one check and
enclose the check with both Form NC-EDU and Form D-400V.
To designate part of your overpayment to the N.C. Education
Endowment Fund, see the instructions for Line 31 on Page 15.
Out of the Country. Fill in the circle if you or, if married ling
jointly, your spouse were out of the country on the statutory due
date of the return. (For more information, see “When Must I File”
on page 7.)
Deceased Taxpayer Information. If you are a surviving spouse
or an executor, administrator, or court-appointed personal
representative, (collectively “personal representative”) of an
individual who died during tax year 2019, you may be required to
le a return on the decedent’s behalf.
If you are a personal representative and you are ling a tax return
for an unmarried individual or a married ling separate return
for an individual who died during tax year 2019, enter the name
of the deceased and your address in the “Name and Address”
section. In the “Deceased Taxpayer Information” section, ll in
the circle and enter the taxpayer’s date of death. You should also
sign the tax return. In addition, attach to the tax return a copy
of the certicate that shows your appointment. A refund due on
a return led for a deceased taxpayer by a person other than a
spouse or personal representative will be mailed to the Clerk of
Superior Court of the county in which the taxpayer resided.
If you are a surviving spouse and you choose to le married ling
jointly with your spouse who died during tax year 2019, enter
your name, the name of the deceased, and your address in the
“Name and Address” section of the return. In the “Deceased
Taxpayer Information” section, enter the date of the decedent’s
death in the space provided. You should also sign the tax return.
Instructions for Form D-400,
Individual Income Tax Return
If you are a surviving spouse and you choose to le married
ling separately for your spouse who died during tax year 2019,
enter the name of the deceased taxpayer and your address in
the “Name and Address” section of the return. In the “Deceased
Taxpayer Information” section, enter the date of the decedent’s
death in the space provided. You should also sign the tax return.
Important: Form D-407, Income Tax Return for Estates and
Trusts, must be led for an estate for the period from the date
of death to the end of the taxable year if the estate had taxable
income from North Carolina sources or income which was for the
benet of a North Carolina resident, and the estate is required to
le a federal tax return for estates and trusts.
Residency Status. Fill in the applicable circles to indicate whether
you and, if married ling jointly, your spouse were residents of
North Carolina for the entire year. If married ling separately, do not
complete the information for your spouse. (For more information
on determining your residency status, see “Who Must File a North
Carolina Individual Income Tax Return?” on page 5.)
Important: If you or your spouse, if married ling jointly, were
not full-year residents of North Carolina in tax year 2019, you
must complete and attach Form D-400 Schedule PN, Part-Year
Resident and Nonresident Schedule, to determine what percent
of your total income is from North Carolina sources. (For more
information on Form D-400 Schedule PN, see Page 19.)
Veteran Information. Fill in the applicable circles to indicate
whether you and, if married ling jointly, your spouse are veterans.
If married ling separately, do not complete the information for your
spouse. Veteran information, which is voluntarily reported, is used
to compile a report about the number of veterans ling tax returns
in North Carolina. No information regarding your tax liability will be
shared. Information specic to individual employers or employees
shall remain condential in accordance with G.S. 105-259.
Federal Extension. Fill in the circle to certify that you and, if
married ling jointly, your spouse were granted an automatic
extension to le your 2019 federal income tax return. Important:
You must certify that you were granted an automatic federal
extension. Otherwise, your state return will be subject to
applicable penalties. (For more information, see “Will I Owe
Interest and Penalties?” on page 8.)
Lines 1 through 5 – Filing Status
Fill in the circle next to the same ling status you checked on your
federal tax return. If you did not le a federal tax return, you should
ll in the circle that corresponds to the ling status you would have
been entitled to if you had led a federal income tax return. If your
federal return does not reect a North Carolina address, you must
attach a copy of your federal tax return to your state tax return.
If you le a joint federal return and your spouse is a nonresident
of North Carolina who had no North Carolina taxable income, you
may le a joint state return or a married ling separately state
return. If you choose to le a separate North Carolina return, you
must complete either a federal return as married ling separately
reporting only your income and deductions or a schedule showing
the computation of your separate income and deductions and
attach it to your North Carolina return.
Line 6 – Federal Adjusted Gross Income
The starting point for determining North Carolina taxable income is
federal adjusted gross income. Therefore, before you begin your
Page 12
North Carolina tax return, you must determine federal adjusted gross income. If you led a 2019 federal tax return, enter the federal adjusted
gross income from your completed federal return. If you did not le a federal income tax return, you must complete a schedule showing the
computation of your federal adjusted gross income and deductions. Attach the schedule to your North Carolina income tax return.
Important: If federal adjusted gross income is negative, enter the amount on Line 6 and ll in the circle next to the line to indicate the
amount is negative.
Line 7 – Additions to Federal Adjusted Gross Income
In calculating North Carolina taxable income, a taxpayer MUST add to federal adjusted gross income certain items that are taxable
to North Carolina that were not included in federal adjusted gross income. Before making this entry, complete Part A of Form D-400
Schedule S. (For more information, see “Additions to Federal Adjusted Gross Income” on Page 16.)
Line 9 – Deductions from Federal Adjusted Gross Income
In calculating North Carolina taxable income, a taxpayer may deduct from federal adjusted gross income certain items that were taxable
at the federal level that are not taxable to North Carolina. Before making this entry, complete Part B of Form D-400 Schedule S. (For
more information, see “Deductions from Federal Adjusted Gross Income” on Page 17.)
Line 10 – Child Deduction
Line 10a. Enter the number of qualifying children for whom you were allowed a federal child tax credit for tax year 2019. Important:
If you do not have a qualifying child as dened under Internal Revenue Code (“IRC”) section 24, you cannot claim the child
deduction. For federal tax purposes, a qualifying child is dened as a child under age 17 at the end of 2019 who meets several other
conditions as required by federal law. (For more information on determining whether your child is a qualifying child for federal tax
purposes, see federal publication 972, Child Tax Credit.)
Line 10b. Enter the amount of the child deduction. To compute the child deduction, complete the “Child Deduction Worksheet,” below.
Child Deduction Table
Filing Status Federal Adjusted Gross Income Deduction Amount Per Qualifying Child
Married Filing Jointly/Qualifying
Widow(er)/Surviving Spouse
Up to $40,000 $2,500
Over $40,000 - Up to $60,000
$2,000
Over $60,000 - Up to $80,000
$1,500
Over $80,000 - Up to $100,000
$1,000
Over $100,000 - Up to $120,000
$500
Over $120,000 $0
Head of
Household
Up to $30,000 $2,500
Over $30,000 - Up to $45,000
$2,000
Over $45,000 - Up to $60,000
$1,500
Over $60,000 - Up to $75,000
$1,000
Over $75,000 - Up to $90,000
$500
Over $90,000 $0
Single/Married Filing Separately
Up to $20,000 $2,500
Over $20,000 - Up to $30,000
$2,000
Over $30,000 - Up to $40,000
$1,500
Over $40,000 - Up to $50,000
$1,000
Over $50,000 - Up to $60,000
$500
Over $60,000 $0
Child Deduction Worksheet
1. Filing status (From D-400, Lines 1 through 5) ....................................................................................................... 1. ________________
2. Federal adjusted gross income (From D-400, Line 6) .......................................................................................... 2. ________________
3. Number of qualifying children under age 17 for whom a federal tax credit was claimed ...................................... 3. ________________
Enter the amount from Line 3 above on Form D-400, Line 10a.
4. Deduction amount per qualifying child from the “Child Deduction Table” .............................................................. 4. ________________
5. Child deduction (Multiply Line 3 by Line 4) ............................................................................................................ 5. ________________
Enter the amount from Line 5 above on Form D-400, Line 10b.
Page 13
Line 11 – N.C. Standard Deduction or N.C.
Itemized Deductions
You may deduct from federal adjusted gross income either the
N.C. standard deduction or N.C. itemized deductions. In most
cases, your state income tax will be less if you take the larger of
your N.C. itemized deductions or your N.C. standard deduction.
On Line 11, enter either the N.C. standard deduction or N.C.
itemized deductions, whichever is applicable. Make sure you ll in
the correct circle to indicate which deduction you are claiming. Fill
in one circle only. Important: DO NOT enter the amount of your
federal standard deduction or your federal itemized deductions
on Line 11. The N.C. standard deduction and the N.C. itemized
deductions are not identical to the federal amounts and are
subject to certain North Carolina limitations. In addition, there is no
additional N.C. standard deduction amount for taxpayers who are
age 65 or older or blind.
N.C. Standard Deduction. Use the chart below to determine the
amount of your N.C. standard deduction based on your ling status:
Important: If you claim the N.C. standard deduction and you
do not have any additions to or deductions from federal adjusted
gross income, DO NOT complete Form D-400 Schedule S.
N.C. Itemized Deductions. To compute North Carolina itemized
deductions, complete Form D-400 Schedule S, Part C, Lines 16
through 24. (For more information, see “N.C. Itemized Deductions”
on Page 18.)
If your ling status is: Your standard deduction is:
Single $ 10,000
Married ling jointly/Qualifying widow(er)/
Surviving spouse $ 20,000
Married ling separately
If spouse does not claim itemized deductions $ 10,000
If spouse claims itemized deductions 0
Head of household $ 15,000
N.C. Standard Deduction Chart
If you are not eligible for the federal standard deduction,
your N.C. standard deduction is ZERO. (For information
on who is eligible for the federal standard deduction, see
federal publication 501, Dependents, Standard Deduction,
and Filing Information.)
Line 16 – Tax Credits
If you claim income tax credits on Line 16, you must complete Form
D-400TC. (For more information on completing Form D-400TC,
see Page 19.) Important: Failure to substantiate a tax credit
may result in the disallowance of the tax credit.
Line 14 – North Carolina Taxable Income
If you were a resident of North Carolina for the entire year, enter
the amount from Line 12b on Line 14. If you were a part-year
resident or nonresident, multiply the amount from Line 12b by the
taxable percentage on Line 13.
Important: If North Carolina taxable income is negative, enter the
amount on Line 14 and ll in the circle next to the line to indicate
the amount is negative.
Line 15 – North Carolina Income Tax
To calculate your North Carolina income tax, multiply Line 14 by
the income tax rate of 5.25% (0.0525). If North Carolina taxable
income is zero or less, enter a zero on Line 15.
Line 18 – Consumer Use Tax
North Carolina use tax is due by individuals and businesses on
tangible personal property purchased, leased or rented inside
or outside this state for storage, use, or consumption in North
Carolina pursuant to G.S. 105-164.6. Use tax is also due on
taxable services sourced to North Carolina and certain digital
property purchased inside or outside this state for storage, use, or
consumption in North Carolina. Some out-of-state retailers, remote
sellers or facilitators voluntarily collect North Carolina use tax as
a convenience to their customers. Individuals and businesses
must pay use tax to the Department when retailers, remote
sellers, or facilitators do not collect sales or use tax on taxable
transactions. For additional information about consumer use tax,
visit the Department’s website. Complete Line 18 to report any
consumer use tax that is due. To determine the correct amount of
consumer use tax due for 2019, utilize the use tax table or the use
tax worksheets on Page 24. Note: If you certify that no Consumer
Use Tax is due, ll in the circle in the space provided.
Line 13 – Part-Year Residents and
Nonresidents Taxable Percentage
Part-year residents and nonresidents enter the taxable percentage
as calculated on Form D-400 Schedule PN. The taxable
percentage must be entered as a decimal amount; round to
four decimal places. Note: The resulting percentage may be
greater than 100%. (For more information on completing Form
D-400 Schedule PN, see instructions on Page 19.)
Important: You must attach Form D-400 Schedule PN to Form
D-400 if you or, if married ling jointly, your spouse, were either
a part-year resident or nonresident and you entered a taxable
percentage on Line 13. Include a copy of your federal return if
your federal return does not reect a North Carolina address.
Lines 20a and 20b – N.C. Income Tax Withheld
Enter your North Carolina tax withheld on Line 20a. If you are
married ling jointly, enter your North Carolina withholding on Line
20a and your spouse’s withholding on Line 20b. Do not include
any income tax withheld for a state other than North Carolina
or any other tax amounts that were withheld.
Important: Be sure to attach to your return all wage and tax
statements (W-2’s), 1099s, and other statements on which N.C.
income tax withholding amounts appear. It is not necessary to
attach 1099s on which no North Carolina income tax withheld is
Page 14
reported unless you are claiming a Bailey retirement deduction.
(See Form D-400 Schedule S, Part B, Line 10.) W-2’s or 1099
statements generated by tax software programs cannot be
used to verify North Carolina tax withholding.
Line 21 – Other Tax Payments
a. 2019 Estimated Tax. Enter any estimated income tax
payments for 2019 (including any portion of your 2018 refund
that was applied to your 2019 estimated income tax).
b. Paid with Extension. If you applied for a N.C. extension
(Form D-410), enter the amount of North Carolina income tax
paid with the extension.
c. Partnership. If you are a nonresident partner, enter your
share of the tax paid to North Carolina by the manager of
the partnership on your distributive share of the partnership
income. Include with your return a copy of Form NC K-1 for
Form D-403 provided by the partnership to verify the amount
claimed.
d. S Corporation. If you are a nonresident shareholder of an
S corporation, enter your share of the income tax paid to North
Carolina by an S corporation on your distributive share of the
S corporation income. Include with your return a copy of Form
NC K-1 for Form CD-401S provided by the S corporation to
verify the amount claimed.
Line 22 – Amended Returns Only
(Previous Payments)
Complete Line 22 only if you are amending your 2019 tax return.
Enter the amount of tax paid with the original return (Form D-400,
Line 27) plus any additional tax paid after the original return
was led. If you did not pay the entire balance due shown on
your original return, enter the actual amount that was paid. Do
not include payments of interest or penalties. (For more
information, see “Instructions for Form D-400 Schedule AM,” on
Page 21.)
Line 24 – Amended Returns Only
(Previous Refunds)
Complete Line 24 only if you are amending your 2019 return.
Enter the amount of overpayment, if any, shown on the original
return (Form D-400, Line 28). If the overpayment claimed on
your original return was previously adjusted by the Department,
enter the adjusted overpayment on Line 24. The amount includes
any portion that was refunded or applied to any outstanding debt
or estimated tax, or was contributed to the N.C. Nongame and
Endangered Wildlife Fund, the N.C. Education Endowment Fund,
or the N.C. Breast and Cervical Cancer Control Program. Do
not include interest you received on any refund. (For more
information, see “Instructions for Form D-400 Schedule AM,” on
Page 21.)
Lines 26a through 26e –
Tax, Penalties, and Interest
a. Tax Due. If Line 19 is more than Line 25, you owe additional
tax. Subtract Line 25 from Line 19 and enter the result on Line
26a. If Line 25 is negative, treat Line 25 as a positive number,
add Lines 19 and 25 and enter the additional tax on Line 26a.
b. Penalties. Returns led after the original due date without a
valid state extension are subject to a failure to le penalty of
5% of the tax for each month, or part of a month, the return is
late (maximum 25% of the additional tax due). Returns led
after the original due date are subject to a late payment penalty
of 10% of the unpaid tax. To determine if any penalties apply to
you, see “Will I Owe Interest and Penalties?” on Page 8.
c. Interest. Interest at the rate established by G.S. 105-
241.21 is charged on taxes paid after the original due date
even if an extension of time to le is granted. The interest
rate on underpayments is the same as the interest rate on
overpayments. The rate is established semiannually by the
Secretary of Revenue and is listed on the Department’s
website.
d. Total Penalties and Interest. Add Lines 26b and 26c and
enter the total amount of penalties and interest on Line 26d.
e. Interest on the Underpayment of Estimated Income Tax
and Exceptions. You may owe interest if you underpaid
your estimated tax for any payment period. You will not owe
interest if you had no tax liability in the prior year or if this
year’s tax liability, less any amount withheld and allowable tax
credits, is less than $1,000.
Complete Form D-422 to see if you owe interest on the
underpayment of estimated income tax. Enter the correct
amount of interest on Line 26e. The interest will increase your
tax liability or reduce your overpayment. Do not attach Form
D-422 or D-422A to the completed tax return; however,
you should maintain the forms for future reference.
Exceptions to Underpayment of Estimated Tax. In certain
cases, you may be able to reduce or eliminate underpayment
interest. If either of the following exceptions apply, enter the
exception code in the box provided and enter the interest
amount on Line 26e.
a. Farmers and Fisherman. If you are a farmer or sherman
and you le your 2019 N.C. return and you pay your tax
in full by March 1, 2020, you do not owe interest. You are
a farmer or sherman if you received at least two-thirds
of your gross income for the year from farming or shing.
Enter an “F” in the box provided.
b. Annualized Income. If you completed Form D-422A,
Annualized Income Installment Worksheet, to determine the
amount of interest owed, enter an “A” in the box provided.
Line 27 – Tax Due
Add Lines 26a, 26d, and 26e and enter the total on Line 27. This
is the total tax, penalties, and interest due. Mail your return and
payment to the North Carolina Department of Revenue, P.O.
Box 25000, Raleigh, North Carolina 27640-0640.
Make your check or money order payable to the “North Carolina
Department of Revenue.” The Department will not accept a check
or money order unless it is drawn on a U.S. (domestic) bank and
the funds are payable in U.S. dollars. Important: You can pay
any tax due online using the Department’s website. (For more
information on payment options, visit the Department’s website.)
Form D-400V (Individual Income Payment Voucher). Form
D-400V is a personalized payment voucher that you should
Page 15
send with any balance due. This voucher allows the Department
to process payments more accurately and efciently with fewer
errors. To generate a personalized payment voucher, visit the
Department’s website.
Form D-400V Amended (Amended Individual Income Payment
Voucher). When ling an amended 2019 tax return, an individual
who owes additional tax should include Form D-400V Amended.
Form D-400V Amended allows the Department to process
amended payments more accurately and efciently with fewer
errors. To generate an amended personalized payment voucher,
visit the Department’s website.
Form NC-EDU (N.C. Education Fund Contribution). Form
NC-EDU is a personalized voucher that you must send with any
contribution made to the N.C. Education Fund. The voucher
allows the Department to process the contribution accurately
and efciently with fewer errors. To generate the N.C. Education
Fund personalized payment voucher, visit the Department’s
website. Note: If you owe additional tax and would like to make
a contribution to the N.C. Education Endowment Fund, you may
write one check for the combined amount of tax due plus the
contribution. Enclose the check with both Form NC-EDU and
Form D-400V.
The Department strongly encourages the use
of personalized payment vouchers.
Line 28 – Overpayment
If Line 19 is less than Line 25, you have overpaid your tax. Subtract
Line 19 (and any amount shown on Line 26e) from Line 25 and
enter the amount of the overpayment on Line 28.
Line 29 – Estimated Income Tax
If you have overpaid your tax, you may elect to have a portion of
your overpayment applied to your estimated tax for the following
year by entering the amount to be applied on Line 29. The election
to apply any overpayment to 2020 cannot be changed after
the 2019 return is led.
The last allowable date for making a 2020 estimated tax payment
is January 15, 2021; therefore, to apply a portion of your refund
to 2020 estimated tax, you must le your 2019 return by January
15, 2021.
Line 30 – N.C. Nongame and
Endangered Wildlife Fund
Help keep North Carolina wild by
contributing a portion of your refund to the
N.C. Nongame and Endangered Wildlife
Fund. Your tax deductible contributions
are essential to monitoring and managing
our wildlife populations, including
turtles, ying squirrels, frogs, mussels,
salamanders, and hundreds of bird
species from terns and pelicans to woodpeckers and warblers.
Conserving these species and their habitats is important to our
state, our economy, and our quality of life. If wildlife conservation
is important to you, please give what you can and help conserve
North Carolina’s wildlife for future generations to enjoy. If you wish
to contribute part or all of your refund to the N.C. Nongame and
Endangered Wildlife Fund, enter the amount of your contribution
on Line 30. Your election to contribute to the N.C. Nongame
and Endangered Wildlife Fund cannot be changed after your
2019 return is led.
If you are not due a refund, you may still contribute to this fund
by donating online or mailing your donation directly to the North
Carolina Wildlife Resources Commission, 1702 Mail Service
Center, Raleigh, North Carolina 27699-1700. Checks should be
made payable to the Nongame & Endangered Wildlife Fund. (For
more information about the fund or to donate online, visit www.
ncwildlife.org/Give-Donate.)
Line 31 – N.C. Education Endowment Fund
The North Carolina Education Endowment
Fund (N.C. Education Fund) was created to
provide additional support and funding for
K-12 public schools. If you wish to contribute
part or all of your refund to the N.C. Education
Fund, enter the amount of the contribution on
Line 31. Your election to contribute to the
N.C. Education Fund cannot be changed
after your 2019 return is led.
If you are not due a refund, you may still contribute to the N.C.
Education Fund by: (1) making a contribution with your tax return;
or (2) mailing a donation directly to the North Carolina Department
of Public Instruction, Cash Collections, 6336 Mail Service Center,
Raleigh, N.C. 27699-6336.
Line 32 – N.C. Breast and Cervical Cancer
Control Program
The N.C. Breast and Cervical Cancer
Control Program Fund (NC BCCCP) is used
for the early detection of breast and cervical
cancer through the N.C. Cancer Prevention
and Control Branch of the Division of Public
Health of the Department of Health and
Human Services. The NC BCCCP provides
free or low-cost breast and cervical cancer
screening and follow-up services to women
who meet income and age eligibility and for
whom insurance does not cover the full cost of services. If you
wish to contribute part or all of your refund to NC BCCCP, enter the
amount of your contribution on Line 32. Your election to contribute
to NC BCCCP cannot be changed after your 2019 return is led.
If you are not due a refund, you may still contribute to the NC
BCCCP by mailing a donation directly to N.C. Cancer Prevention
and Control Branch of the Division of Public Health of the
Department of Health and Human Services, 1922 Mail Service
Center, Raleigh, North Carolina 27699-1922. Checks should
be made payable to “North Carolina Department of Health and
Human Services” with an indication either on the check or in an
attached note that it is a contribution for the N.C. Breast and
Cervical Cancer Control Program Fund.
Page 16
Signature and Verication
Your return is not considered a valid return unless you sign it. If
you are ling a joint return, your spouse must also sign. Be sure to
date your return and enter your contact phone number. Providing
your contact phone number may help speed the processing of your
return. If you answer questions over the phone, we may be able
to process your return without mailing you a letter. If you are ling
a joint return, you can enter either your or your spouse’s contact
phone number.
Paid Preparer. If you want to allow your paid preparer to discuss
certain tax matters with the Department, check the applicable box
in the signature area of your return. If you check the box, you and
your spouse, if ling a joint return, are authorizing the Department
to call the paid preparer to answer any questions that may arise
during the processing of your return. You also are authorizing the
paid preparer to:
• Give the Department any information that is missing from your
return,
• Call the Department for information about the processing of
your return or the status of your refund or payment(s),
• Receive copies of notices or transcripts related to your return,
upon request, and
• Respond to proposed notices of assessment or notices of
adjustment.
Important: You are not authorizing the paid preparer to receive
any refund check, bind you to anything (including any additional
tax liability), or otherwise represent you before the Department
regarding audit activity or a request for a Departmental review of
proposed assessment or a proposed denial of refund. Those types
of matters require a Power of Attorney, Gen 58, to be led with
the Department. Paid preparer authority is extended only to an
individual paid preparer, not to employees of a company. (For more
information on Power of Attorney, visit the Department’s website.)
Your paid preparer must sign and date the tax return.
The preparer should also provide their identication
number (FEIN, SSN, or PTIN).
Instructions for Form D-400
Schedule S, Supplemental Schedule
Federal adjusted gross income as dened in the Internal Revenue
Code, effective as of January 1, 2019, is the starting point for
determining North Carolina taxable income. This means that to the
extent North Carolina follows federal tax provisions in calculating state
tax liability, changes made to the Internal Revenue Code as of this
date apply to North Carolina. However, certain federal tax provisions
do not apply to North Carolina because of statutory modications to
federal adjusted gross income, including, but not limited to: (1) North
Carolina does not conform to the federal standard deduction, (2)
Line 1. Interest Income from Obligations of States Other than
North Carolina. Enter the amount of interest received from notes,
bonds, and other obligations of states and political subdivisions
other than North Carolina if not included in federal adjusted gross
income. This includes exempt interest dividends received from
regulated investment companies (mutual funds) to the extent
such dividends do not represent interest from obligations of North
Carolina or its political subdivisions.
Line 2. Deferred Gains Reinvested into an Opportunity Fund
under IRC Section 1400Z-2. North Carolina did not conform to
the temporary deferral of income for certain gains timely invested
in a qualied Opportunity Fund under Internal Revenue Code
section 1400Z-2. These gains are not deferred for North Carolina
tax purposes and must be included in determining your state tax
payable. Therefore, an addition to federal adjusted gross income
is required for gains reinvested into a qualied Opportunity Fund
under IRC section 1400Z-2. Note: If you were required to include
a gain in federal adjusted gross income under IRC section 1400Z-2
in tax year 2019, you may deduct the gain to the extent the same
income was included in the calculation of N.C. taxable income
during a prior year.
Line 3. Bonus Depreciation. North Carolina did not adopt the
50% bonus depreciation provisions in IRC sections 168(k) or
168(n) for property placed in service for tax year 2019. Therefore,
you must add 85% of the amount of bonus depreciation deducted
on your federal return to your state return. Note: If you are
required to addback bonus depreciation in tax year 2019, you
may deduct 20% of the amount added back in the rst ve taxable
years beginning with tax year 2020. (For further guidance on
bonus depreciation, visit the Department’s website.)
Line 4. IRC Section 179 Expense. North Carolina did not
conform to the increased federal expense deduction or increased
investment limitations for tax year 2019. N.C. dollar and investment
limitations are $25,000 and $200,000, respectively. Therefore,
you must add 85% of the difference between the IRC section 179
expense deduction using federal limitations and the deduction
using N.C. limitations to your state return. Note: If you are
required to addback IRC section 179 expenses in tax year 2019,
you may deduct 20% of the amount added back in the rst ve
taxable years beginning with tax year 2020. (For further guidance
on IRC section 179, visit the Department’s website.)
Line 5. Other Additions to Federal Adjusted Gross Income.
Enter the total amount of the following other additions. Make sure
you attach an explanation or schedule of the item(s) to Form
D-400.
(1) The amount by which your basis of property under federal
law exceeds your basis of property for state purposes must
be added to your adjusted gross income in the year that you
dispose of the property.
(2) If you carry over a net operating loss from another year to the
Part A. Additions to Federal Adjusted Gross Income (If
you have items that are not included in federal adjusted gross
income but are taxable to North Carolina, complete Lines 1
through 6.)
Line 34 – Amount to be Refunded
Enter the amount of overpayment to be refunded on Line 34. The
amount to be refunded cannot exceed Line 28 minus the total of
Lines 29, 30, 31, and 32. Refunds of less than $1.00 are made
only upon request.
North Carolina does not conform to federal itemized deductions, and
(3) North Carolina requires certain items to be added to or deducted
from federal adjusted gross income, (collectively “state adjustments”).
Each individual must determine if the state adjustments apply
to that individual’s tax return. Form D-400 Schedule S, Part A
and Part B specically, provides some of the state adjustments,
but is not an all-inclusive list. (For detailed information on state
adjustments, see G.S. 105-153.5 and G.S. 105-153.6.)
Page 17
2019 federal return, an addition is required for the amount of
net operating loss carried to the 2019 year that is not absorbed
and will be carried forward to subsequent years. (For more
information on net operating losses, refer to the Department’s
bulletins for individual income tax.)
(3) Effective for taxable years beginning on or after January
1, 2006 and repealed effective for taxable years beginning
on or after January 1, 2014, certain contributions made to
North Carolina’s National College Savings Program (“N.C.
529”) were deductible for state tax purposes. If you took a
state tax deduction for contributions made to the N.C. 529
Plan while the deduction was in effect, and in tax year 2019,
you withdrew funds from the Plan, you must add to federal
adjusted gross income the amount deducted in the prior tax
year to the extent the funds withdrawn were not used for a
purpose allowed under IRC section 529.
(4) The amount by which a shareholder’s share of S Corporation
income is reduced under IRC section 1366(f)(2) for the
taxable year by the amount of built-in gains tax imposed on
the S Corporation under IRC section 1374.
Line 6. Total Additions. Add Lines 1 through 5. Enter the total
on Line 6 and on Form D-400, Line 7. Important: If you enter an
amount on Line 6, you must attach D-400 Schedule S to Form
D-400. If you do not attach Form D-400 Schedule S to Form
D-400, the Department may not be able to process your return.
Line 7. State Income Tax Refund. Enter the amount of any state
or local income tax refund that is included in federal adjusted gross
income.
Line 8. Interest from United States Obligations. Enter
the amount of interest received from notes, bonds, and other
obligations of the United States (such as U.S. savings bonds,
treasury notes and bills, etc.) or United States possessions.
Line 9. Taxable Portion of Social Security and Railroad
Retirement Benets. Social security and railroad retirement
benets are not subject to state income tax. Enter any Title 2
social security benets received under the Social Security Act and
any Tier 1 or Tier 2 railroad retirement benets received under
the Railroad Retirement Act that were included in federal adjusted
gross income. Railroad Retirement Act benets include railroad
unemployment insurance benets and railroad sickness benets.
Line 10. Retirement Benets Received by Vested Government
Retirees (Bailey Settlement). As a result of the North Carolina
Supreme Court’s decision in Bailey v. State of North Carolina,
North Carolina may not tax certain retirement benets received
by retirees (or by beneciaries of retirees) of the state of
North Carolina and its local governments or by United States
government retirees (including military). The exclusion applies
to retirement benets received from certain dened benet
plans, such as the North Carolina Teachers’ and State Employees’
Retirement System, the North Carolina Local Governmental
Employees’ Retirement System, the North Carolina Consolidated
Judicial Retirement System, the Federal Employees’ Retirement
System, or the United States Civil Service Retirement System,
if the retiree had ve or more years of creditable service as
of August 12, 1989. The exclusion also applies to retirement
benets received from the state’s §401(k) and §457 plans if the
retiree had contributed or contracted to contribute to the plan
prior to August 12, 1989. The exclusion does not apply to
local government §457 plans or to §403(b) annuity plans.
Benets from other state, local, and federal retirement plans may
or may not be excluded depending on rulings in the Bailey case.
Part B. Deductions from Federal Adjusted Gross Income
(If you have items of income that are included in federal adjusted
gross income but are not taxable to North Carolina, complete Lines
7 through 15.)
The exclusion does not apply to retirement benets paid to
former teachers and state employees of other states and
their political subdivisions.
A retiree entitled to exclude retirement benets from North Carolina
income tax should claim a deduction on Line 10 for the amount of
excludable retirement benets included in federal adjusted gross
income. Even if all your retirement is excludable under Bailey,
you must still le a North Carolina return if you meet the minimum
gross income ling requirements on Page 6. A copy of Form 1099-
R or Form W-2 received from the payer must be attached to the
return to support the deduction.
Line 11. Bonus Depreciation. You may deduct an amount equal
to 20% of the bonus depreciation deduction added to federal
adjusted gross income on your 2014, 2015, 2016, 2017, and 2018
state tax returns.
Line 12. IRC Section 179 Expense. You may deduct an amount
equal to 20% of the IRC section 179 expense deduction added to
federal adjusted gross income on your 2014, 2015, 2016, 2017,
and 2018 state tax returns.
Line 13. Recognized IRC Section 1400Z-2 Gain. You may
deduct a gain included in federal adjusted gross income under
IRC section 1400Z-2 to the extent the same amount was included
in the calculation of N.C. taxable income in a prior tax year.
Line 14. Other Deductions from Federal Adjusted Gross
Income. Enter the total amount of the following other deductions.
Make sure you attach an explanation or schedule of the
item(s) to Form D-400.
(1) The gain from the sale or disposition of North Carolina
obligations issued before July 1, 1995, is deducted from
adjusted gross income if the law under which the obligations
were issued specically exempts the gain.
(2) The amount by which your basis of property for state purposes
exceeds your basis of property for federal purposes must be
deducted from your adjusted gross income in the year that
you dispose of the property.
(3) Income that meets both of the following requirements:
a. Is earned or received by an enrolled member of any
federally recognized Indian tribe.
b. Is derived from activities on any federally recognized
Indian reservation while the member resides on the
reservation. Income from intangibles having a situs on
the reservation and retirement income associated with
activities on the reservation are considered income
derived from activities on the reservation.
(4) The amount by which the deduction for an ordinary and
necessary business expense was required to be reduced
or was not allowed under the Code because you claimed a
federal tax credit in lieu of a deduction.
(5) In the event of an actual or deemed transfer of an asset
occurring on or after January 1, 2013, wherein the tax basis
of the asset carries over from the transferor to the transferee
for federal income tax purposes, the transferee must add
any remaining bonus depreciation deductions allowed to the
basis of the transferred asset and depreciate the adjusted
basis over any remaining life of the asset. The transferor is
not allowed any future bonus depreciation deductions. (For
more information, see G.S. 105-153.6(e) and (f), as well as
the Department’s website.)
(6) The amount deposited during the taxable year to a personal
education savings account (“PESA”) under Article 41 of
Chapter 115C of the General Statues to the extent the
deposit was included federal adjusted gross income.
Page 18
(7) The amount paid from the State Emergency Response and
Disaster Relief Reserve Fund for hurricane relief assistance
to the extent this amount is included in federal adjusted
gross income. This amount does not include amounts paid
to you from the State Emergency Response and Disaster
Relief Fund for goods or services provided by you.
(8) The amount received as an economic incentive pursuant to
G.S. 143B-437.012 or Part 2G or Part 2H of Article 10 of
G.S. 143B to the extent this amount is included in federal
adjusted gross income.
Line 15. Total Deductions. Add Lines 7 through 10, 11f, 12f,
13, and 14. Enter the total on Line 15 and on Form D-400, Line 9.
Important: If you enter an amount on Line 15, you must attach
Form D-400 Schedule S to Form D-400. If you do not attach Form
D-400 Schedule S to Form D-400, the Department may not be
able to process your return.
You may deduct from federal adjusted gross income either the
N.C. standard deduction or N.C. itemized deductions even if you
did not claim itemized deductions on your federal return. In most
cases, your state income tax will be less if you take the larger of
your N.C. itemized deductions or your N.C. standard deduction.
N.C. Standard Deduction. The standard deduction for most
individuals can be obtained from the N.C. Standard Deduction
Chart on Page 13 of these instructions or from the N.C. Standard
Deduction Chart printed on Form D-400 Schedule S, Part C.
If you claimed the N.C. Standard Deduction and you did
not enter an amount on Line 6 or Line 15 of Form D-400
Schedule S, DO NOT attach Form D-400 Schedule S to
Form D-400.
N.C. Itemized Deductions. North Carolina itemized deductions
are not identical to federal itemized deductions. To determine the
amount of N.C. itemized deductions, complete Lines 16 through
24. Important: If you deduct N.C. itemized deductions, you must
include Form D-400 Schedule S with Form D-400.
Line 16. Home Mortgage Interest. Enter the amount allowed
as a deduction for interest paid or accrued during tax year 2019
under IRC section 163(h) with respect to any qualied residence.
(For a denition of qualied residence, see federal publication 936,
Home Mortgage Interest Deduction.)
Line 17. Real Estate Property Taxes. Enter the amount allowable
as a deduction for property taxes paid or accrued on real estate
under IRC section 164 for tax year 2019. An individual that les a
joint return, single return, or as head of household may not deduct
more than $10,000 of real estate property taxes while married
individuals ling separately may not deduct more than $5,000.
Line 18. Home Mortgage Interest and Real Estate Property
Taxes before Limitation. Add Lines 16 and 17 and enter the
result on Line 18.
Line 19. Home Mortgage Interest and Real Estate Property
Taxes Limitation. Statutorily, the sum of qualied mortgage
interest and real estate property taxes claimed may not exceed
$20,000. For spouses ling as married ling separately or married
Part C. N.C. Standard Deduction or N.C. Itemized Deductions
(If you choose to claim North Carolina itemized deductions,
complete Lines 16 through 24.)
Repayment of amounts under a claim of right if $3,000 or less:
1. Enter the amount of claim of right income
repaid during 2019. ................................................1. ___________
2. Enter amount from D-400 Line 6, federal
adjusted gross income. ..........................................2. ___________
3. Multiply Line 2 by 2% (0.02) (If negative, enter
the number zero) ...................................................3. ___________
4. Subtract Line 3 from Line 1. Enter amount on
Form D-400 Schedule S, Part C, Line 23. .............4. ___________
Repayment of Claim of Right Worksheet
Line 24. Total N.C. Itemized Deductions. Add Lines 20, 21, 22d,
and 23. This is the amount of North Carolina itemized deductions
that you may deduct on Form D-400, Line 11.
ling jointly, the total mortgage interest and real estate property
taxes claimed by both spouses combined may not exceed
$20,000. For spouses ling as married ling separately with a joint
obligation for home mortgage interest and real estate property
taxes, the deduction for these items is allowable to the spouse
who actually paid them. If the amount of home mortgage interest
and real estate property taxes paid by both spouses exceeds
twenty thousand dollars ($20,000), the deductions must be
prorated based on the percentage paid by each spouse. For joint
obligations paid from joint accounts, the proration is based on the
income reported by each spouse for that taxable year.
Line 20. Home Mortgage Interest and Real Estate Property
Taxes after Limitation. Compare Line 18 with Line 19 and enter
the smaller amount.
Line 21. Charitable Contributions. Enter the amount allowable
as a deduction for charitable contributions under IRC section 170
for tax year 2019.
Line 22a. Medical and Dental Expense before Limitation.
Enter the amount allowable as a deduction for medical and dental
expenses under IRC section 213 for tax year 2019. Importantly,
do not include on Line 22a items that are not included in federal
adjusted gross income. For example, do not include insurance
premiums paid by your employer.
Line 22b. Enter the Amount from Form D-400, Line 6. If the
amount on Line 6 is negative, ll in the circle next to the line to
indicate the amount is negative.
Line 22c. Multiply Line 22b by 10% (0.10). If this amount is
zero or less, enter a zero on Line 22c.
Line 22d. Medical and Dental Expenses after Limitation.
Subtract Line 22c from Line 22a. If Line 22c is more than Line
22a, enter a zero on Line 22d.
Line 23. Repayment of Claim of Right Income. You may be
entitled to a deduction for the repayment of income included in
federal adjusted gross income in an earlier tax year because it
appeared that you had an unrestricted right to such income, to
the extent the repayment is not deducted in arriving at federal
adjusted gross income in 2019. If the repayment is more than
$3,000, the deduction is the amount of repayment. Note: If you
claimed itemized deductions on your 2019 federal income tax
return, enter the amount claimed on federal Schedule A, Line 16.
If the repayment is $3,000 or less, refer to the worksheet below to
calculate your deduction.
Page 19
If you claim N.C. itemized deductions, you must attach
Form D-400 Schedule S to Form D-400. If you do not
attach Form D-400 Schedule S to Form D-400, the
Department may not be able to process your return.
Instructions for Form D-400 Schedule
PN, Part-Year Resident
and Nonresident Schedule
If you or your spouse, if married ling jointly, were not full-year
residents of North Carolina during tax year 2019, you must
complete Form D-400 PN to determine the percentage of federal
adjusted gross income, as adjusted, that is subject to North
Carolina income tax. You are a “part-year resident” if you moved
to North Carolina and became a resident during the tax year, or
you moved out of North Carolina and became a resident of another
state during the tax year. You are a “nonresident” if you were not
a resident of North Carolina at any time during the tax year. (For
more information, see “Who Must File a North Carolina Individual
Income Tax Return?” on Page 5.)
You and your spouse, if married ling jointly, must ll in the
applicable circle(s) indicating your residency status for tax year
2019. Part-year residents must also enter the dates of North
Carolina residency in the boxes provided.
Lines 1 through 15. In Column A, Lines 1 through 15, enter the
income you received from all sources during tax year 2019. (If you
led a 2019 federal income tax return, enter the amounts reported
on your federal return.) If married ling jointly, you must include
the total income from all sources of both spouses, even if only one
spouse is a resident. In Column B, enter the amount of Column A
received from North Carolina sources or income received while a
resident of North Carolina.
NOTE: A part-year resident must include all income received
while a resident of North Carolina. This would include income from
another state if this income was received while a resident of North
Carolina. In addition, a part-year resident receiving partnership
income from a partnership doing business in North Carolina and
in one or more other states must prorate the partner’s share of
the partnership’s income attributable and not attributable to North
Carolina between the partner’s periods of residence and non-
residence in accordance with the number of days in each period.
Line 16. Total Income. For Column A and Column B, add Lines 1
through 15. Enter the total of each column on Line 16.
Lines 17a through Line 17e. North Carolina Additions to
Federal Adjusted Gross Income. In Column A, enter the
amounts entered on Form D-400 Schedule S, Part A, that relate to
gross income. In Column B, enter the amount of Column A that is
applicable to North Carolina.
Example: If you received interest income from obligations of a
state other than N.C. of $1,200 evenly during the year and you
became a North Carolina resident on July 1, you should enter
Part A. Residency Status
Part B. Allocation of Income for Part-Year Residents and
Nonresidents
$1,200 on Line 17a of Column A and $600 on Line 17a of Column
B.
Line 18. Total Additions. For Column A and Column B, add
Lines 17a through 17e. Enter the total of each column on Line 18.
Lines 19a through 19h. North Carolina Deductions from
Federal Adjusted Gross Income. In Column A, enter the
amounts entered on Form D-400 Schedule S, Part B, that relate to
gross income. In Column B, enter the amount of Column A that is
applicable to North Carolina.
Line 20. Total Deductions. For Column A and Column B, add
Lines 19a through 19h. Enter the total of each column on Line 20.
Line 21. Total Income Modied by N.C. Adjustments. For
Column A and Column B, add Line 16 plus Line 18 minus Line 20.
Line 22. Enter the amount from Column B, Line 21. If the amount
on Line 22 is negative, ll in the circle next to the Line to indicate
the amount is negative.
Line 23. Enter the amount from Column A, Line 21. If the amount
on Line 23 is negative, ll in the circle next to the Line to indicate
the amount is negative.
Line 24. Divide Line 22 by Line 23. This is the percentage of your
federal adjusted gross income, as adjusted, that is subject to North
Carolina income tax. The resulting percentage may be greater
than 100%. Enter the result as a decimal amount; round to four
decimal places on Form D-400, Line 13.
If you enter an amount on Form D-400, Line 13, you
MUST attach Form D-400, Schedule PN to Form D-400.
If you do not, the Department may be unable to process
your return.
Part C. Part-Year Residents and Nonresidents Taxable
Percentage
Instructions for Form D-400TC,
Individual Income Tax Credits
Form D-400TC and, if applicable, Form NC-478, and Form NC-
Rehab must be led for any taxable year in which you are eligible
to claim a tax credit or an installment of a tax credit against your
tax liability. This requirement applies even if your tax liability is
not large enough for you to benet from the credit. (For further
information on tax credits, refer to the Department’s bulletins for
individual income tax.)
If you claim a tax credit on Form D-400, Line 16, you
MUST attach Form D-400TC to Form D-400. If you do
not, the Department may be unable to process your
return. Failure to substantiate a tax credit may result in
the disallowance of that credit. For more information on
tax credits, see the Department’s website.
Page 20
When income is taxed by North Carolina for a period during which you were a legal resident of North Carolina and the same income is
also taxed by another state or country because it was earned in or derived from sources within that state or country, a tax credit may be
claimed, but not on the basis of a withholding statement alone. Important: 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.
North Carolina residents complete Form D-400 and include all income both within and outside the state. Compute North Carolina income
tax as though no credit is to be claimed. Then, complete Part 1 of Form D-400TC to determine the amount of allowable tax credit. Note:
If you wish to claim a tax credit for taxes paid to more than one state or country, do not complete Lines 1 through 6. Instead, use the “Out-
of-State Tax Credit Worksheet” below to determine the amount of allowable tax credit for each state or country.
Line 1. Total Income from All Sources while a Resident of N.C. Modied by N.C. Adjustments to Federal Adjusted Gross Income.
Enter on Line 1 the total amount of income from all sources you received while a resident of North Carolina, adjusted by the applicable
additions and deductions to federal adjusted gross income that relate to gross income that you listed on Form D–400 Schedule S, Parts A
and B. Important: If the amount on Line 1 is negative, enter the amount and ll in the circle located next to Line 1 to indicate the amount
is negative.
Line 2. Portion of Line 1 that was Taxed by Another State or Country. Enter on Line 2 the portion of total income from all sources
you received while a resident of North Carolina, adjusted by the applicable additions and deductions to federal adjusted gross income that
relate to gross income (from Line 1, above), that was taxed by another state or country. Include on Line 2 your share of any S Corporation
income that is attributable to and taxed by another state, whether or not the other state taxed the income at the individual or corporate
level.
Line 3. Divide Line 2 by Line 1. Enter the result as a decimal amount; round to four decimal places.
Line 4. Total North Carolina Income Tax. Enter the amount from Form D-400, Line 15.
Line 5. Multiply Line 4 by Line 3
Line 6. Amount of Net Tax Paid to the Other State or Country on the Income Shown on Line 2. Enter on Line 6 only the amount of
net tax paid to another state or country shown on Line 2. The amount of net tax paid is any prepayment of tax (tax withheld, estimated
tax payments, amount paid with an extension, etc.) plus any additional tax paid less any refunds received or expected to be received.
Include on Line 6 the net tax you paid to another state on your share of S Corporation income or your pro rata share of the net corporate
tax paid by the S Corporation to another state that taxes the corporation rather than the shareholder. Attach a schedule showing the total
amount of tax paid to the other state by the S Corporation, and how your pro rata share of the tax was determined. Important: You must
attach a copy of the tax return led with the other state or country and a copy of your check, receipt or other proof showing payment of
income tax paid to the other state or country.
Line 7a. Credit for Income Tax Paid To Another State or Country. Enter the lesser of Line 5 or Line 6. This is the amount of tax credit
for income tax paid to another state or country.
Part 1. Credit for Income Tax Paid to Another State or Country – N.C. Residents Only
1. Total income (loss) from all sources while a resident of N.C. modied by N.C. adjustments
to federal gross income ....................................................................................................................................................1. _____________
2. The portion of Line 1 that was taxed by the other state or country ................................................................................... 2. _____________
3. Divide Line 2 by Line 1 and enter the result as a decimal amount (Round to four decimal places) .................................3. _____________
4. Enter total North Carolina income tax (From Form D-400, Line 15) .................................................................................4. _____________
5. Multiply Line 4 by Line 3 ...................................................................................................................................................5. _____________
6. Amount of net tax paid to the other state or country on the income shown on Line 2 (See above
for denition of net tax paid.) ............................................................................................................................................6. _____________
7. Enter the lesser of Line 5 or Line 6. To determine the total amount of credit for income tax paid to another state or
country, add the amount of Line 7 on each worksheet and enter the total on Form D-400TC, Line 7a. On Line 7b,
be sure to enter the number of states or countries for which a credit is claimed. ................................................7. _____________
Out-of-State Tax Credit Worksheet
(Use a separate worksheet to determine the separate credit for each state or country.)
.
Page 21
Article 3D - Historic Rehabilitation Tax Credits. This Article
expired for qualied rehabilitation expenditures and rehabilitation
expenses incurred on or after January 1, 2015. To claim a tax
credit under Article 3D, the historic property must be placed in
service before January 1, 2023. For additional information on
Article 3D credits, see G.S. 105-129.35, G.S. 105-129.36, and the
Department’s website.
Line 8a. Enter the amount of qualied expenditures incurred prior
to January 1, 2015 with respect to an income-producing historic
structure placed in service during tax year 2019. Important: Enter
the amount of qualifying expenditures only in the rst year the
credit is taken.
Line 8b. Enter the installment amount of the tax credit for
rehabilitating an income-producing historic structure.
Lines 9a. Enter the amount of qualied expenses incurred prior
to January 1, 2015 with respect to a nonincome-producing historic
structure placed in service during tax year 2019. Important: Enter
the amount of qualifying expenses only in the rst year the credit
is taken.
Line 9b. Enter the installment amount of the tax credit for
rehabilitating a nonincome-producing historic structure.
Article 3H - Mill Rehabilitation Tax Credit. This Article
expired January 1, 2015, for rehabilitation projects for which
an application for an eligibility certication was submitted on or
after that date. To claim a tax credit for rehabilitating a historic
mill facility, an application for an eligibility certication must
have been submitted to the State Historic Preservation Ofcer
before January 1, 2015. Eligibility certications obtained under
this Article expire January 1, 2023. For additional information on
Article 3H credits, see G.S. 105-129.71, G.S. 105-129.72, and
the Department’s website.
Line 10a. Enter the amount of qualied rehabilitation expenditures
with respect to an income-producing historic mill facility placed in
service during tax year 2019. Important: Enter the amount of
qualifying expenditures only in the rst year the credit is taken.
Line 10b. Enter the total amount of tax credit for rehabilitating an
income-producing historic mill facility.
Line 11a. Enter the amount of qualied rehabilitation expenditures
with respect to a nonincome-producing historic mill facility placed
in service during tax year 2019. Important: Enter the amount of
qualifying expenditures only in the rst year the credit is taken.
Line 11b. Enter the installment amount of the tax credit for
rehabilitating a nonincome-producing historic mill facility.
Article 3L - Historic Rehabilitation Tax Credits Investment
Program. Article 3L replaced the historic rehabilitation tax credits
generally available under Article 3D, which expired for qualied
rehabilitation expenditures and rehabilitation expenses, incurred
on or after January 1, 2015. This Article expires for qualied
rehabilitation expenditures and expenses incurred on or after
January 1, 2024. To claim a tax credit under Article 3L, qualied
rehabilitation expenditures and expenses must be placed in service
by January 1, 2032. For additional information on Article 3L,
see G.S. 105-129.105, G.S. 105-129.106, and the Department’s
website. Important: To claim a credit under Article 3L, you
Part 2. Credits for Rehabilitating Historic Structures
must complete Form NC-Rehab and attach Form NC-Rehab to
the front of Form D-400.
Line 12. Enter the total amount of tax credit for rehabilitating an
income-producing historic structure. (From Form NC-Rehab, Part
4.)
Line 13. Enter the total amount of the tax credit for rehabilitating a
nonincome-producing historic structure. (From Form NC-Rehab,
Part 4.)
Line 14. Enter the amount of tax credits carried over from previous
tax years. Important: Do not include any carryover of income tax
credits taken on Form NC-478 or Form NC-Rehab.
Line 15. Add Lines 7a, 8b, 9b, 10b, 11b, 12, 13, and 14.
Line 16. Enter the amount of North Carolina income tax (From
Form D-400, Line 15).
Line 17. Compare Line 15 with Line 16. Enter the lesser amount
of Line 15 or Line 16.
Line 18. Enter the total amount of business and energy tax credits
taken in 2019. (Attach Form NC-478 and any required supporting
schedules to the front on Form D-400.)
Note: Many of the business and energy tax credits available
to individuals are repealed or are designated for sunset. Please
refer to each specic Article for details. A taxpayer that qualied
for a tax credit that has expired or sunset may continue to take
any remaining installments or carryovers in 2019 if the taxpayer
continues to meet the statutory eligibility requirements previously
required of each particular tax credit. In most cases, the Form
NC-478 series is used to calculate and report business incentive
and energy tax credits, less the sum of all other credits that the
taxpayer claims. For additional information on tax credits and to
obtain Form NC-478 tax forms, see the Department’s website.
Line 19. Add Lines 17 and 18. This is the total amount of tax
credits to be taken for tax year 2019. Enter the amount of Line
19 on Form D-400, Line 16. The amount of Line 19 cannot exceed
the tax shown due on Form D-400, Line 15.
Part 3. Computation of Total Tax Credits to be Taken in Tax
Year 2019
The tax credits described in these instructions cannot
exceed the tax liability for the tax year, reduced by
other tax credits.
Instructions for Form D-400
Schedule AM, Amended Schedule
You must le an amended 2019 tax return if:
(1) You made an error or received additional information after
you led your original 2019 North Carolina state income tax
return.
General Instructions
Page 22
Specic Line Instructions
Form D-400 Schedule AM. Enter the calendar or other tax year
being amended, your name, address, and social security number
If you led Form D-400 Schedule S, D-400 Schedule PN,
or Form D-400TC with your original return, then you
must le these forms with your amended return, even if
there are no changes to the form.
(2) You need to report a net operating loss carryback.
(3) The Internal Revenue Service made changes to your 2019
federal return. You must report the changes to the state by
ling an amended return within six months from the date
you receive a report from the IRS. If you do not amend
your state return to reect the federal changes and the
Department receives a report from the Internal Revenue
Service, an assessment may be made by the Department
within three years from the date of receipt of the report. You
also forfeit your right to any refund, which might have been
due because of the federal changes.
(4) You voluntarily led an amended 2019 federal income tax
return with the Internal Revenue Service and the return
contains adjustments that increase the amount of your state
tax payable. The North Carolina amended return must be
led within six months of ling the federal amended return.
If you le the North Carolina amended return within the time
required by law, the period for the Department to propose an
assessment against you for any tax due is one year after the
state amended return is led or three years after the original
return was led or due to be led, whichever is later. If you
do not le the North Carolina amended return within the
time period required by law, the period for the Department to
propose an assessment against you for any tax due is three
years after the date the federal amended return was led
with the Internal Revenue Service. Note: If you voluntarily
le an amended federal return with the Internal Revenue
Service and the return contains adjustments that decrease
the amount of your state tax payable, the state amended
return must be led within the general statute of limitations
for refunds. The general statute of limitations for obtaining
a refund of an overpayment is the later of the following: (1)
three years after the due date of the return, or (2) two years
after the payment of the tax. If a valid extension is led, a
refund claimed on an amended return may be led within
three years from the extended due date.
When ling an amended North Carolina individual income tax
return, ll in the “Amended Return” circle located at the top right of
Form D-400. Attach Form D-400 Schedule AM to the front of Form
D-400. You must attach the following information to your amended
return, when applicable, as documentation to support the changes:
• A copy of a federal audit report.
• A copy of federal Form 1040X and supporting federal
schedules and forms if changes are also applicable to your
federal return.
• W-2 and 1099 statements to verify a change in income tax
withheld.
• NC K-1 to verify tax payments made by a pass-through
entity.
• Federal Form 1040X or Form 1045, including Schedule A
and B, if amending as a result of a net operating loss.
• Any other required schedule or supporting form.
in black or blue ink only. In addition, if you are married ling jointly,
enter your spouse’s name and social security number. If your
mailing address has changed since you led your original 2019
North Carolina state income tax return, ll in the applicable circle.
Fill in the circle(s) indicating the reasons you are amending your
return and explain in detail the reason for each change. Attach the
completed D-400 Schedule AM to Form D-400.
Form D-400, Lines 1 through 21. Fill in the appropriate circle
indicating the return is an amended return. Make any necessary
changes to the original Form D-400 by showing the corrected
amounts on Lines 1 through 21.
Form D-400, Line 22. Include on Line 22 the amount paid with the
original return (Form D-400, line 27) plus the additional tax paid
since your original return was led. If you did not pay the entire
balance due shown on your original return, enter the actual amount
that was paid. Do not include payments of interest or penalties.
Form D-400, Line 24. Include on Line 24 the overpayment, if
any, shown on the original return (Form D-400, Line 28). If the
overpayment claimed on your original return was previously
adjusted by the Department, enter the adjusted overpayment on
Line 24. This amount includes any portion that was refunded,
applied to any outstanding debt, or to estimated tax, or contributed
to the N.C. Nongame and Endangered Wildlife Fund, the N.C.
Education Endowment Fund, or the N.C. Breast and Cervical
Cancer Program. Important: Do not include interest you received
on any refunds.
Form D-400, Line 29. If you elected to have your original refund
applied to your estimated tax, do not enter this amount again on
Line 29. However, you may elect to have an overpayment from
your 2019 amended return applied to your 2020 estimated tax if
your amended return is led by January 15, 2021.
Form D-400, Lines 30, 31, and 32. If you wish to contribute part
or all of your overpayment from your 2019 amended return to: (1)
the N.C. Nongame and Endangered Wildlife Fund, (2) the N.C.
Education Endowment Fund, or (3) the N.C. Breast and Cervical
Cancer Program, enter the amount of the contribution on Lines 30
through 32 as applicable. Important: If you previously elected
to have your original refund applied to the N.C. Nongame and
Endangered Wildlife Fund, the N.C. Education Endowment Fund,
or the N.C. Breast and Cervical Cancer Program, do not enter
these amounts again on Lines 30 through 32 since these amounts
have already been deducted from your original refund.
Amended Return Payment Options. When ling an amended
return, individuals that owe additional tax can pay the additional
tax due using one of the following options:
• Pay Online - You can pay your tax online by bank draft (free),
MasterCard or Visa ($2 convenience fee for every $100 paid).
(For more information, see the Department’s website.)
• Payment Voucher - If you do not pay your tax online, you
must generate a personalized D-400V Amended payment
voucher. The personalized payment voucher is located on the
Department’s website. The voucher allows the Department to
process the amended return payment more accurately and
efciently with fewer errors.
Enclose the completed voucher and payment with your
amended return. Do not send cash. Write your name, address,
and social security number(s) on your payment.
Page 23
Tax Assistance
Information about individual income tax and tax forms may be obtained from our website at www.ncdor.gov. You
may also call the Taxpayer Assistance and Collection Center at 1-877-252-3052 (toll free) for additional assistance
in completing your tax forms or to request forms.
If you are disabled, have a low income, or are a senior citizen, income tax returns can be prepared free of charge
through the VITA (Volunteer Income Tax Assistance)/TCE (Tax Counseling for the Elderly) programs. For locations
and dates of assistance, taxpayers in North Carolina can call the Internal Revenue Service toll free, 1-800-829-
1040, weekdays.
N.C. Department of Revenue, P.O. Box 25000, Raleigh, NC 27640-0640
Mailing Addresses
If you are due
a refund:
N.C. Department of Revenue
P.O. Box R
Raleigh, NC 27634-0001
If you are not
due a refund:
N.C. Department of Revenue
P.O. Box 25000
Raleigh, NC 27640-0640
For Original Returns Only:
For Amended Returns Only:
Taxpayer Bill of Rights
As a taxpayer, you are always entitled to fair, professional, prompt and courteous service from the North Carolina
Department of Revenue. Our goal is to apply the state’s tax laws consistently and fairly so that your rights are
protected and to see that you pay only your fair share of North Carolina tax. (For more information on your rights
as a North Carolina taxpayer, visit the Department’s website.)
Property for Sale
Looking for a bargain on good used vehicles, furniture, appliances, tools, and jewelry? Visit www.ncdor.gov/seized-
property-auctions-collection-division and click on Vehicles and Property Available for Auction.
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Page 24
Consumer Use Tax
1. Enter the total amount of out-of-state purchases, including delivery charges, for 1/1/19 through 3/31/19 ................................ 1. __________
2. Multiply Line 1 by 7.5% (.075) in Durham and Orange Counties; 7.25% (.0725) in Mecklenburg and Wake Counties; 7%
(.07) in Alexander, Anson, Ashe, Buncombe, Cabarrus, Catawba, Cherokee, Clay, Cumberland, Davidson, Duplin, Edgecombe,
Gaston, Greene, Halifax, Harnett, Haywood, Hertford, Jackson, Jones, Lee, Lincoln, Martin, Montgomery, New Hanover,
Onslow, Pasquotank, Pitt, Randolph, Robeson, Rockingham, Rowan, Rutherford, Sampson, Surry, and Wilkes Counties;
and 6.75% (.0675) in all other counties, and enter the amount .................................................................................................. 2. __________
3. Enter the total amount of out-of-state purchases, including delivery charges, for 4/1/19 through 12/31/19 .............................. 3. __________
4. Multiply Line 3 by 7.5% (.075) in Durham and Orange Counties; 7.25% (.0725) in Mecklenburg and Wake Counties; 7%
(.07) in Alexander, Anson, Ashe, Buncombe, Cabarrus, Catawba, Cherokee, Clay, Cumberland, Davidson, Duplin, Edgecombe,
Gaston, Graham, Greene, Halifax, Harnett, Haywood, Hertford, Jackson, Jones, Lee, Lincoln, Martin, Montgomery, Moore, New
Hanover, Onslow, Pasquotank, Pitt, Randolph, Robeson, Rockingham, Rowan, Rutherford, Sampson, Stanly, Surry, Swain,
and Wilkes Counties; and 6.75% (.0675) in all other counties, and enter the amount ............................................................... 4. __________
5. Enter the amount of sales tax legally and properly paid to another state on the purchases. This amount may not
exceed the total of Lines 2 and 4 ............................................................................................................................................... 5. __________
6. Add Lines 2 and 4, then subtract Line 5 and enter the result, rounded to the nearest whole dollar, here and on
Form D-400, Line 18 .................................................................................................................................................................. 6. __________
Use Tax Worksheet for Taxpayers Who Have Records of Out-of-State Purchases
Use Tax Table for Taxpayers Who Do Not Have Any Records of Out-of-State Purchases
The use tax amount is .0675% of North Carolina taxable income. If you do not have any records of your out-of-state purchases, you may use the table below to estimate
your use tax liability.
Use Tax Worksheet for Taxpayers Who Have Partial Records of Out-of-State Purchases
1. For purchases of items that cost less than $1,000, see the Use Tax Table above to estimate the use
tax due based on your North Carolina taxable income shown on Form D-400, Line 14 and enter the amount .............................. 1. __________
2. For purchases of items that cost $1,000 or more:
2a. Enter the total amount of purchases, including delivery charges, of $1,000 or more for 1/1/19 through 3/31/19 ............... 2a. __________
2b. Multiply Line 2a by 7.5% (.075) in Durham and Orange Counties; 7.25% (.0725) in Mecklenburg and Wake Counties; 7%
(.07) in Alexander, Anson, Ashe, Buncombe, Cabarrus, Catawba, Cherokee, Clay, Cumberland, Davidson, Duplin, Edgecombe,
Gaston, Greene, Halifax, Harnett, Haywood, Hertford, Jackson, Jones, Lee, Lincoln, Martin, Montgomery, New Hanover,
Onslow, Pasquotank, Pitt, Randolph, Robeson, Rockingham, Rowan, Rutherford, Sampson, Surry, and Wilkes Counties;
and 6.75% (.0675) in all other counties, and enter the amount ............................................................................................. 2b. ____________
2c. Enter the total amount of purchases, including delivery charges, of $1,000 or more for 4/1/19 through 12/31/19 .................. 2c. __________
2d. Multiply Line 2c by 7.5% (.075) in Durham and Orange Counties; 7.25% (.0725) in Mecklenburg and Wake Counties; 7%
(.07) in Alexander, Anson, Ashe, Buncombe, Cabarrus, Catawba, Cherokee, Clay, Cumberland, Davidson, Duplin, Edgecombe,
Gaston, Graham, Greene, Halifax, Harnett, Haywood, Hertford, Jackson, Jones, Lee, Lincoln, Martin, Montgomery, Moore,
New Hanover, Onslow, Pasquotank, Pitt, Randolph, Robeson, Rockingham, Rowan, Rutherford, Sampson, Stanly, Surry,
Swain, and Wilkes Counties; and 6.75% (.0675) in all other counties, and enter the amount ............................................ 2d. ______________
3. Add Lines 1, 2b, and 2d and enter the total amount of use tax due ........................................................................................... 3. __________
4. Enter the amount of sales tax legally and properly due and paid to another state on the purchases. This amount may
not exceed the amount on Line 3 ............................................................................................................................................... 4. __________
5. Subtract Line 4 from Line 3 and enter the result, rounded to the nearest whole dollar, here and on Form
D-400, Line 18 ............................................................................................................................................................................ 5. __________
If Line 14, D-400 is:
$ 0 - 2,200 ............ $ 1
2,200 - 3,700 ............... 2
3,700 - 5,200 ............... 3
5,200 - 6,700 ............... 4
6,700 - 8,100 ............... 5
8,100 - 9,600 ............... 6
9,600 - 11,100 ............... 7
11,100 - 12,600 ............... 8
12,600 - 14,100 ............... 9
14,100 - 15,600 ............. 10
$ 15,600 - 17,000 .......... $ 11
17,000 - 18,500 ............. 12
18,500 - 20,000 ............. 13
20,000 - 21,500 ............. 14
21,500 - 23,000 ............. 15
23,000 - 24,400 ........... 16
24,400 - 25,900 ............. 17
25,900 - 27,400 ............. 18
27,400 - 28,900 ............. 19
28,900 - 30,400 ............. 20
$ 30,400 - 31,900 .......... $ 21
31,900 - 33,300 ............. 22
33,300 - 34,800 ............. 23
34,800 - 36,300 ............. 24
36,300 - 37,800 ............. 25
37,800 - 39,300 ............. 26
39,300 - 40,700 ............. 27
40,700 - 42,200 ............. 28
42,200 - 43,700 ............. 29
43,700 - 45,200 ............. 30
45,200 and over ............... Line 14 x .0675%
At Least
But Less
Than
Use Tax
Amount is
At Least
But Less
Than
Use Tax
Amount is
At Least
But Less
Than
Use Tax
Amount is
If Line 14, D-400 is: If Line 14, D-400 is:
42,000 copies of this booklet were printed at a cost of $4,200.21 or approximately $0.1000 each
(Taxpayers who owe consumer use tax must utilize the Use Tax Table or the Use Tax Worksheets below to determine
the amount of consumer use tax due for tax year 2019. For more information, see Page 13.
