Adjustment for Domestic Production Activities

The federal American Jobs Creation Act of 2004 allows a deduction equal to a portion of a taxpayer's qualified production activities income. The deduction is claimed on Line 35 of Federal Form 1040. North Carolina does not follow the domestic production activities deduction. Therefore, if you claimed the deduction on your federal return, the amount claimed must be added to federal adjusted gross income on Line 38 of Form D-400.

For tax years beginning on or after January 1, 2014, this addition is no longer required.