North Carolina Credits

Credit for Income Tax Paid to Another State or Country – N.C. Residents Only

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 “Outof-State Tax Credit Worksheet” below to determine the amount of allowable tax credit for each state or country.

Credits for Rehabilitating Historic Structures

Article 3D - Historic Rehabilitation Tax Credits.

This Article expired for qualified 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.

Article 3H - Mill Rehabilitation Tax Credit.

This Article expired January 1, 2015, for rehabilitation projects for which an application for an eligibility certification was submitted on or after that date. To claim a tax credit for rehabilitating a historic mill facility, an application for an eligibility certification must have been submitted to the State Historic Preservation Officer before January 1, 2015. Eligibility certifications 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.

Article 3L - Historic Rehabilitation Tax Credits Investment Program.

Article 3L replaced the historic rehabilitation tax credits generally available under Article 3D, which expired for qualified rehabilitation expenditures and rehabilitation expenses, incurred on or after January 1, 2015. This Article expires for qualified rehabilitation expenditures and expenses incurred on or after January 1, 2024. To claim a tax credit under Article 3L, qualified 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 must complete Form NC-Rehab and attach Form NC-Rehab to the front of 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 specific Article for details. A taxpayer that qualified for a tax credit that has expired or sunset may continue to take any remaining installments or carryovers in 2020 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