Form D-400 - Individual Income Tax Return - 2014

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April 1, 2015
NORTH CAROLINA’S REFERENCE TO THE INTERNAL REVENUE CODE UPDATED -
IMPACT ON 2014 NORTH CAROLINA CORPORATE AND INDIVIDUAL INCOME TAX
RETURNS
Governor McCrory signed into law Session Law 2015-2 (Senate Bill 20) on March 31, 2015. The legislation
updated North Carolina’s reference to the Internal Revenue Code to the Code as enacted as of January 1,
2015. As a result, North Carolina corporate and individual income tax law generally follows the Tax
Increase Prevention Act of 2014 (“TIPA”), which extended several provisions in federal law that had sunset
at the end of 2013. The law does not follow (decouples from) TIPA in six instances. The table below
identifies those instances and describes each difference and which lines on the tax returns are impacted.
Federal Provision
State Provision
NC C Corporate
NC Individual
Return
Return
1
Bonus depreciation is
Addition required for
Include addition
Include addition on
extended to property
85% of bonus
on Form CD-405,
Form D-400
placed in service in
depreciation deducted on
Schedule H, Line
Schedule S, Part
2014.
federal return.
1.g.
A, Line 3.
2
Code section 179 dollar
Dollar and investment
Include addition
Include addition on
and investment
limitations set at $25,000
on Form CD-405,
Form D-400
limitations are increased
and $200,000,
Schedule H, Line
Schedule S, Part
to $500,000 and
respectively. Addition
1.g.
A, Line 3.
$2,000,000,
required for 85% of the
respectively, for 2014.
difference between the
deduction using federal
limitations and the
deduction using NC
limitations.
3
Mortgage insurance
Mortgage insurance
Not applicable
Do not include
premiums are treated as
premiums are not treated
mortgage
qualified residence
as qualified residence
insurance
interest for 2014.
interest.
premiums in the
amount of
mortgage interest
deducted on Form
D-400 Schedule S,
Part C, Line 13.
4
Cancellation of qualified
Addition required for
Not applicable
Include addition on
principal residence debt
amount of cancellation of
Form D-400
is excluded from gross
qualified principal
Schedule S, Part
income.
residence debt excluded
A, Line 3.
from gross income on the
federal return.
Income Tax Division
Page 1 of 2
April 1, 2015

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