North Carolina conforms to the federal tax law as it existed on January 1, 2023. Federal tax law changes passed July 4, 2025, do not apply when calculating North Carolina income tax. As a result, you may need to add back or adjust the AGI amount that is carried from the federal return to the North Carolina return. See the NC DOR Notice for details.

In TaxAct, adjust the AGI that is used for North Carolina purposes by following the steps below.

Online

1. From within your TaxAct return, click State, then North Carolina on the left.
2. Expand the Basic Information section, then click Adjustment to Federal Adjusted Gross Income.
3. Enter your Total net adjustment to Federal adjusted gross income on this screen and click Continue.
4. You will be prompted to attach a PDF explaining the differences during the e-filing steps.

Desktop

Using Forms View, enter an adjustment directly on Form D-400, below Line 6. You will be prompted to attach a PDF explaining the differences during the e-filing steps.

If using the Q&A, follow the steps below:

1. From within your TaxAct return, click State, then North Carolina on the left.
2. Expand the Basic Information section, then click Adjustment to Federal Adjusted Gross Income.
3. Enter your Total net adjustment to Federal adjusted gross income on this screen and click Continue.
4. You will be prompted to attach a PDF explaining the differences during the e-filing steps.

Note: An adjustment is not needed for the following deductions as they do not impact the Federal AGI calculation (Form 1040, line 11a):

• “No Tax on Tips”
• “No Tax on Overtime”
• “No Tax on Car Loan Interest”
• Enhanced Deduction for Seniors

Note: This new tax bill was signed into law on July 4, 2025. The One Big Beautiful Bill Act (OBBB or OB3) is also being referred to by lawmakers as the Working Families Tax Cut Act. You may see one or both names used, but they refer to the same set of tax changes.