What NC State Tax Credits Affect my Tax Refund Status?
Earned Income Credit (EIC)
The EIC program benefits those who work but make under a certain amount of money. It’s primarily for individuals and couples with qualifying children. Most know about the federal program, but there are also state EIC programs. This can affect your NC state refund status.
If you qualify for the federal program, then North Carolina will grant you the state EIC as well. Although it’s a bit on the low side at 5% refundable tax credit, their EIC can really help your NC state refund status in the long run.
If you claim the standard deduction on your federal tax return, you have the option to claim a credit for charitable contributions on your NC state tax return. If you chose to itemize on the federal return, you cannot claim this credit.
It allows 7% of the amount by which your contributions for the year exceed 2% of your federal adjusted gross income. If your federal AGI was 10,000 dollars, then 2% of this is 200 dollars. If you gave 500 dollars in charitable contributions, then the credit is good for 21 dollars, as this is 7% of 300 dollars, the difference between what you gave and the 2% of your AGI. This can lead to a big break on your NC state refund status.
When you claim your children on your federal return, you may claim a credit tax credit of $100 on the state return for the same child. This can help out your NC state refund status. However, your federal adjusted gross income must be less than the amounts for your filing status here:
- Married Filing Jointly: $100,000
- Head of Household: $80,000
- Single: $60,000
- Married Filing Separately: $50,000
Also, the child in question must be under 17 on the last day of the year. If the child still qualifies, this can result in a better NC state refund status.