New Carolina state tax basis is the Federal Adjusted Gross Income (AGI).

Interest/Divident Income: Interest and Divident income from U.S. government bonds are exempt from State Taxes.

Rent Income: Same as federal

Capital Gain: Same as federal plus exemption for gains from certain North carolina obligations issued before july1 1995

Unemployment Income: Same as federal

Social Security Benefits: All social security income is exempt from state taxes.

State Bond Interest: Taxable except North Carolina obligations

Health Savings Accounts: Same as federal

Disability: Same as federal

Lottery: Same as federal

Federal Income Tax: Not deductible

Other Taxes: Up to $35,000 in severance pay is deductible if received as a result of permanent involuntary termination of employment through no-fault of the employee. Deduction for federal Hope or Lifetime Learning credits claimed in lieu of higher education expense deduction.*In addition, certain retirement benefits from public defined benefit plans are exempt.

Check other state tax links below.