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  • Writer's pictureKathryn Bruns, CPA

NC recent "decoupling" from certain federal tax provisions

The term "decoupling" is used in the state tax world, to describe when a state does not agree with the federal tax treatment of a certain item. Accordingly, the state expects that an adjustment be made for the item on its state tax return.

North Carolina has recently issued guidance on certain recent federal provisions that it is decoupling from. Here's a general description of just a few of them (there's a bunch):

  1. Federal is once again allowing as an itemized deduction, mortgage insurance premiums. NC will not allow this deduction

  2. Federal allows the exclusion of income from cancellation of qualified principal residence debt. NC will not allow this exclusion

  3. Federal is once again allowing qualified tuition deduction. NC will not allow this deduction

  4. Federal net operating loss carryback and limit changes are different for NC

  5. The new federal 2020 charitable contribution deduction will not be allowed for NC

Feel free to reach out if you need help navigating all of this, as some of these items apply for 2019 and may warrant filing an amended 2019 tax return if materially impacted.

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