EARNED INCOME TAX CREDIT (EITC)

North Carolina does not currently offer a state-level EITC.

Latest Legislative Action:

• A bill was introduced in the 2017 session to restore the state’s EITC.

• During the 2016 legislative session, multiple bills to restore the state’s EITC were held in committee for further consideration in 2017. HB 1076 would have reinstated the credit at 10% of the federal EITC, which would be 5% higher than it stood before its elimination in 2013; SB 757 would incrementally revive the state credit to 5% over two years.

Notes:

• The state enacted a refundable EITC in 2007 at 3.5% of the federal credit and increased the rate to 5% in 2008. The legislature moved to expand it again in 2009 but followed up the failed attempt with a proposal to erase the credit’s refundable portion in 2011.
• After a brief one-year extension in 2012, the EITC was eliminated completely for tax years 2014 and beyond, while the rate for tax year 2013 was cut to 4.5%.

CHILD TAX CREDIT (CTC)

Rate (Non-Refundable):¹

• For spouses filing jointly with a combined adjusted gross income of up to $40,000: $125/qualifying child
• For spouses filing jointly with a combined adjusted gross income between $40,000 and $100,000: $100/qualifying child
• Income thresholds are 20% lower for individuals filing as head of household and 50% lower for both single taxpayers and spouses filing separately.

Eligibility: All North Carolina taxpayers who qualify for the federal CTC are eligible as long as adjusted gross income does not exceed $100,000 for spouses filing jointly, $80,000 for individuals filing as head of household, or $50,000 for single filers and spouses filing separately.

CHILD AND DEPENDENT CARE TAX CREDIT (CDCTC)

North Carolina does not currently offer a state-level CDCTC.

Latest Legislative Action: During the 2016 legislative session, lawmakers considered a bill that would reenact the state’s CDCTC, but the measure currently rests in committee for further consideration in 2017.

Notes: North Carolina used to have a CDCTC that varied between 7% and 13% of the expenses eligible for the federal credit, depending on filing status, income, and type of dependent. The credit was limited to $390 per dependent, not to exceed $780 total. In 2013, however, the credit was eliminated.