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Some states have chosen to fully adopt the tax provisions included in the Federal Further Consolidated Appropriations Act (FCAA) and Coronavirus Aid, Relief, and Economic Security (CARES) ACT. Others, like North Carolina, have chosen to adopt only some of those provisions. Because this "decoupling" occurred very late in the tax season, you may need to amend your return.

Decoupling Provisions Impacting Individuals (1040 returns)

  • Cancellation of Qualified Principal Residence Indebtedness
  • Qualified Tuition and Related Expenses
  • NOL Carryback
  • NOL Limit of Eighty Percent of Taxable Income
  • Business Interest Expense Limitation
  • Excess Business Loss Limitation
  • Payment Protection Program Loan Forgiveness and Expense Deductions

Decoupling Provisions Impacting Individuals (1120 returns)

  • Business Interest Expense Limitation
  • Payment Protection Program Loan Forgiveness and Expense Deductions

Amending Returns

According to a notice released by the North Carolina Dept. of Revenue: "If you have already filed a 2019 North Carolina income tax return and your federal adjusted gross income (for individuals) or federal taxable income (for corporations) is impacted by the amendments to federal law included in FCAA and CARES Act or by the provisions of federal law from which North Carolina has decoupled, you must file an amended North Carolina return.”

To update D-400 Schedule S, Part A, Line 5 in the TaxAct 1040 amended return:

  1. From within your TaxAct return (Online or Desktop), click State to expand, then click North Carolina (or NC). On smaller devices, click in the upper left-hand corner, then click State.
  2. Click Additions in the North Carolina Quick Q&A Topics menu.
  3. Continue with the interview process to enter all of the appropriate information.
  4. On the screen titled North Carolina - Other Additions, enter the Other additions amount, then click Continue.

To update CD-405 Schedule H, Line 1.h in the TaxAct 1120 amended return:

  1. From within your TaxAct return (Online or Desktop), click State to expand, then click North Carolina (or NC). On smaller devices, click in the upper left-hand corner, then click State.
  2. Click Computation of Corporate Income Tax in the North Carolina Quick Q&A Topics menu to expand, then click Additions to Federal Taxable Income.
  3. Continue with the interview process to enter all of the appropriate information.
  4. On the screen titled North Carolina - Other Additions, enter the Description and Amount, then click Continue.

Related Links

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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