D-400: SD Final and Grid

Congress Restores Deductions That Were Scheduled
To Expire For Tax Years Beginning After 2005

On December 9, 2006, Congress enacted the Tax Relief and Health Care Act of 2006, which retroactively restores a number of popular federal tax provisions to the start of 2006. The President is expected to sign the bill into law before the end of this year. The restored provisions were scheduled to expire for tax years beginning after 2005; therefore, the required adjustments for the provisions may not be reflected on all 2006 North Carolina individual income tax forms.

Two of the restored provisions, the deduction for general sales taxes and the deduction for higher education tuition and fees, directly affect the North Carolina return as follows:

1. General sales tax deduction - Taxpayers who claim general sales tax as an itemized deduction in lieu of state and local income taxes on line 5 of federal Schedule A must add back the general sales taxes on line 32 of North Carolina Form D-400.

2. Higher education tuition and fees deduction - Taxpayers who claim the Hope or Lifetime Learning Credit on their federal returns in lieu of the deduction for higher education tuition and fees allowed under section 222 of the Internal Revenue Code may claim a deduction of up to $4,000 for such expenses on line 46 of North Carolina Form D-400.

D-400 Forms Library: SD Final and Grid

Same as D-400: SD Final and Grid

Last modified on: 10/31/07 02:44:48 PM.