Edits for Form D-400:

1. The primary taxpayer and spouse social security numbers must be numeric. “NRA” (non- resident alien) and “applied for” are not allowed.
2. The filing status claimed on lines 1 through 5 must match the filing status claimed on the federal return for a Federal/State return.
3. The filing status claimed on lines 1 through 5 will not match the filing status claimed on the federal return for a State Only return.
4. If the filing status is 2, the name and social security numbers for both the primary taxpayer and the spouse must be entered.
5. The number of exemptions claimed on the State return must match the number of exemptions listed on line 6d of Federal Form 1040 or line 6d of Federal Form 1040A. If Federal Form 1040EZ is filed, the number of exemptions must equal 0, 1, or 2.
6. The Federal Adjusted Gross Income from the federal return Form 1040, line 37; Form 1040A, line 21; or Form 1040EZ, line 4, must be present. Note: This edit is vital to the processing of the North Carolina e-file return. It should be displayed in IRS field 0305j and must be present on every return.
7. If the State return has a domestic address, the following IRS fields must be present: field #0075, #0085, #0095 and #0100.
8. If the State return has a foreign address, the following IRS fields must be present: field #0077, #0087, and #0098.
9. The percentage computations on Form D-400 lines 12 and 51 and Form D-400TC line 3 should be rounded to four decimal points.
10. INCOME (D-400, Page 1)
    1. Line 8 is the sum of lines 6 and 7.
    2. Line 10 is line 8 minus line 9.
    3. Full-year residents must enter the amount from line 11 on line 13. Part-year residents and nonresidents must multiply the amount on line 11 by line 12 and enter the result on line 13.
    4. Line 12 must equal line 51.
11. ADDITIONS TO FEDERAL TAXABLE INCOME (D-400, Page 3)
    1. Line 29 must match the itemized or standard deduction on line 40 of Federal Form 1040 or line 24 of Federal Form 1040A. For 1040EZ Single filers, enter the lesser of $5,350 or the amount from line 5 of Federal Form 1040EZ. For 1040EZ Married Filing Jointly filers, enter the lesser of $10,700 or the amount from line 5 of Federal Form 1040EZ.
    2. Line 31 is line 29 minus line 30. The amount on line 31 cannot be less than zero.
    3. Line 32 is the amount of State and local taxes from line 5 of Federal Schedule A and any foreign income taxes included on line 8 of Federal Schedule A. Important: Taxpayers required to complete the Federal “Itemized Deductions Worksheet” must complete the “State Tax Adjustment Worksheet” to determine the amount to enter on line 32.
    4. If a taxpayer itemized deductions, line 33 is the lesser of line 31 or line 32. If a taxpayer claimed the standard deduction, line 33 is the same as line 31 and line 32 should be blank.
    5. Line 34 must equal the number of exemptions claimed multiplied by $900 if the taxpayer’s federal adjusted gross income does not exceed the amounts listed for their filing status. For 1040EZ Single filers, enter zero if the taxpayer can be claimed as a dependent or enter $900 if the taxpayer cannot be claimed as a dependent. For 1040EZ Married Filing Jointly filers, enter zero if both spouses can be claimed as a dependent; enter $900 if only one spouse can be claimed as a dependent; or enter $1,800 if neither spouse can be claimed as a dependent.
       
       Line 34 must equal the number of exemptions claimed multiplied by $1400 if the taxpayer’s federal adjusted gross income exceeds the amounts listed for their filing status. Important: Taxpayers required to complete the Federal “Deduction for Exemptions Worksheet” must complete the State “Personal Exemption Adjustment Worksheet” to determine the amount to enter on line 34.
    6. Line 38 is the sum of lines 33 through 37. Line 7 must equal line 38.
12. DEDUCTIONS FROM FEDERAL TAXABLE INCOME (D-400, Page 3)
    1. Line 39 must match the state or local income tax refund on line 10 of Federal Form 1040.
    2. Line 41 must equal the taxable portion of social security and railroad retirement benefits included on Federal Form 1040, line 20b or Form 1040A, line 14b.
    3. Line 43 must not exceed $4000 for each taxpayer. The filing status must equal 2 to exceed $4000. The maximum amount for line 43 cannot exceed $8000. Line 43 must equal line 4 of the State “Retirement Benefits Worksheet.”
    4. Line 48 is the sum of lines 39 through 47. Line 9 must equal line 48.
13. COMPUTATION OF NC TAXABLE INCOME FOR PART-YEAR RESIDENTS AND NONRESIDENTS (D-400, Page 4)
    1. Line 51 must equal line 49 divided by line 50.
    2. If the taxpayer and/or spouse is a part-year resident of North Carolina, the beginning and ending dates of residency are required.
14. NORTH CAROLINA INCOME TAX (D-400, Page 2)
    1. Line 10 must equal line 11.
    2. Line 14 must equal the North Carolina Tax Table if taxable income on line 13 is less than $68,000. If line 13 is $68,000 or greater, you must use the Tax Rate Schedule to calculate the tax.
15. TAXES PAID (D-400, Page 2)
    1. The filing status must be 2 to enter an amount on line 19b.
    2. Line 21 is the sum of lines 19a, 19b, 20a, 20b, 20c, and 20d.
    3. Line 15 must equal the amount entered on Form D-400TC, Part 4, line 36.
    4. Line 16 is line 15 minus line 14.
    5. Line 18 is the sum of line 16 and line 17.
    6. Line 23 is the sum of lines 22a, 22b and 22c.
16. OVERPAYMENTS (D-400, Page 2)
    1. Line 24 is line 21 minus line 18 and any amount on line 22c. If the result is less than zero, the return is a balance due return and line 24 will be blank.
    2. Line 27 is the sum of line 25 and line 26.
    3. Line 28 is line 24 minus line 27.
17. TAX DUE (D-400, Page 2)
    1. Line 22a is line 18 minus line 21. If the result is less than zero, the return is an overpayment and line 22a will be blank.

Edits for Form D-400TC:

1. PART 1 - CREDIT FOR INCOME TAX PAID TO ANOTHER STATE OR COUNTRY -- NC RESIDENTS ONLY (D-400TC, Page 1)
   1. Line 1 must equal Federal Form 1040, line 22; 1040A, line 15; or 1040EZ, line 4, while a resident of NC adjusted by the applicable additions shown on lines 35 through 37 and/or deductions shown on lines 39 through 47 of Form D-400.
   2. Line 3 is line 2 divided by line 1, rounded to four decimal places.
   3. Line 4 must equal Form D-400, line 14.
   4. Line 5 is line 3 multiplied by line 4.
   5. Line 7a is the lesser of line 5 and line 6. Include in the total on Part 4, line 19.
   6. Line 7b must equal the number of states for which credits are claimed.
   7. Important: If a credit is claimed for tax paid to more than one state or country, do not complete lines 1 through 6 of Part 1. Instead, see the instructions and the Out-of-State Tax Credit Worksheet on Page 13 of the 2007 Individual Income Tax Instruction Booklet.
2. PART 2 - CREDIT FOR CHILD AND DEPENDENT CARE EXPENSES (D-400TC, Page 1)
   1. Line 9 must equal the portion of line 8 that was incurred for dependent(s) under the age of seven and dependent(s) incapable of caring for themselves.
   2. Line 10 is line 9 multiplied by the applicable decimal amount in Column A of the Child and Dependent Care Credit Table.
   3. Line 11 is line 8 minus line 9.
   4. Line 12 is line 11 multiplied by the applicable decimal amount in Column B of the Child and Dependent Care Credit Table.
   5. Line 13 is the sum of line 10 and line 12. Full-year residents must also enter the amount from line 13 on line 15.
   6. Line 14 is for nonresidents and part-year residents to multiply the amount on line 13 by the decimal amount from line 12 of Form D-400. The result must also be entered on line 15. If line 12 of Form D-400 is more than 1.0000, enter the amount from line 13 here and on line 15.
   7. Line 15 is the total Credit for Child and Dependent Care Expenses from line 13 or line 14. Include this amount on line 19, Part 4.
3. PART 3 - CREDIT FOR CHILDREN (D-400TC, Page 2)
   1. Line 16 is $100 multiplied by the number of children for whom a taxpayer is entitled to claim a federal tax credit. This credit can be claimed only if federal adjusted income is less than the amount shown for the filing status in the instruction booklet. Important: This credit can be claimed only for a dependent child who was under 17 years of age on the last day of the tax year.
   2. Line 17 is for nonresidents and part-year residents to multiply the amount on line 16 by the decimal amount on line 12 of Form D-400. The result must also be entered on line 18. If line 12 of Form D-400 is more than 1.0000, enter the amount from line 16 here and on line 18.
   3. Line 18 is the total Credit for Children and must equal line 16 for full-year residents or line 17 for nonresidents and part-year residents. Include this amount on line 19, Part 4.
4. PART 4 - OTHER TAX CREDITS (D-400TC, Page 2)
   1. Line 19 is the sum of lines 7a, 15, and 18.
   2. Line 20b is the credit for charitable contributions by nonitemizers. Complete the Worksheet for Determining Tax Credit for Charitable Contributions. Line 20a is the total amount of charitable contributions. Important: This credit can be claimed only by taxpayers who claim the standard deduction on their federal return.
   3. Line 21 is the Credit for long-term care insurance premiums. Complete the Worksheet for Determining Tax Credit for Premiums Paid on Long-term Care Insurance Contracts on page 14 of the instructions.
   4. Line 22 is the Credit for adoption expenses. Complete the Adoption Tax Credit Worksheet on page 14 of the instructions.
   5. Line 26 is the Credit for rehabilitating an income-producing historic structure. Enter qualified rehabilitation expenditures on line 26a. Enter installment amount of credit on line 26b.
   6. Line 27 is the Credit for rehabilitating a nonincome-producing historic structure. Enter rehabilitation expenses on line 27a. Enter installment amount of credit on line 27b.
   7. Line 28 is the Credit for rehabilitating an income-producing historic mill facility. Enter rehabilitation expenditures on line 28a. Enter amount of credit on line 28b.
   8. Line 29 is the Credit for rehabilitating a nonincome-producing historic mill facility. Enter rehabilitation expenditures on line 29a. Enter installment amount of credit on line 29b.
   9. Line 30 is Other Miscellaneous Income tax credits. Choose the applicable selection(s): Property Taxes on Farm Machinery, Gleaned Crops, Poultry Composting, Handicapped Dwelling Units, Conservation Tillage Equipment and Recycling Oyster Shells.
   10. Line 31 is tax credits carried over from previous year, if any. Do not include any carryover of tax credits claimed on Form NC-478.
   11. Line 32 is the sum of lines 19, 20b, 21, 22, 23, 24, 25, 26b, 27b, 28b, 29b, 30 and 31.
   12. Line 33 is the amount of tax from Form D-400, line 14.
   13. Line 34 is the lesser of line 32 or line 33.
   14. Line 35 is from Form NC-478, Business incentive and energy tax credits.
   15. Line 36 is the sum of lines 34 and 35. Enter the amount here and on line 15, Form D-400. The amount on line 36 may not exceed the tax shown on Form D-400, line 14.