2010 North Carolina Code
Chapter 105 Taxation.
Article 4 - Income Tax.
105-151.11. Credit for child care and certain employment-related expenses.

105‑151.11. Credit for child care and certain employment‑related expenses.

(a) Credit. A person who is allowed a credit against federal income tax for a percentage of employment‑related expenses under section 21 of the Code shall be allowed as a credit against the tax imposed by this Part an amount equal to the applicable percentage of the employment‑related expenses as defined in section 21(b)(2) of the Code. In order to claim the credit allowed by this section, the taxpayer must provide with the tax return the information required by the Secretary.

(a1) Applicable Percentage. For employment‑related expenses that are incurred only with respect to one or more dependents who are seven years old or older and are not physically or mentally incapable of caring for themselves, the applicable percentage is the appropriate percentage in the column labeled "Percentage A" in the table below, based on the taxpayer's adjusted gross income determined under the Code. For employment‑related expenses with respect to any other qualifying individual, the applicable percentage is the appropriate percentage in the column labeled "Percentage B" in the table below, based on the taxpayer's adjusted gross income determined under the Code.

Filing Status Adjusted Gross Percentage A Percentage B

Income

Head of Up to $20,000 9% 13%

Household

Over $20,000

up to $32,000 8% 11.5%

Over $32,000 7% 10%

Surviving

Spouse or

Joint Return Up to $25,000 9% 13%

Over $25,000

up to $40,000 8% 11.5%

Over $40,000 7% 10%

Single Up to $15,000 9% 13%

Over $15,000

up to $24,000 8% 11.5%

Over $24,000 7% 10%

Married

Filing

Separately Up to $12,500 9% 13%

Over $12,500

up to $20,000 8% 11.5%

Over $20,000 7% 10%

(b) Employment Related Expenses. The amount of employment‑related expenses for which a credit may be claimed may not exceed three thousand dollars ($3,000) if the taxpayer's household includes one qualifying individual, as defined in section 21(b)(1) of the Code, and may not exceed six thousand dollars ($6,000) if the taxpayer's household includes more than one qualifying individual. The amount of employment‑related expenses for which a credit may be claimed is reduced by the amount of employer‑provided dependent care assistance excluded from gross income.

(c) Limitations. A nonresident or part‑year resident who claims the credit allowed by this section shall reduce the amount of the credit by multiplying it by the fraction calculated under G.S. 105‑134.5(b) or (c), as appropriate. No credit shall be allowed under this section for amounts deducted from gross income in calculating taxable income under the Code. The credit allowed by this section may not exceed the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowable, except for payments of tax made by or on behalf of the taxpayer. (1981, c. 899, s. 1; 1985, c. 656, ss. 8‑11; 1989, c. 728, s. 1.16; 1993, c. 432, s. 1; 1998‑98, ss. 69, 99; 1998‑100, s. 2; 2006‑18, s. 9.)