Qualifying For The State Earned Income Tax Credit

North Carolina offers a State Earned Income Tax Credit (EITC), which may provide extra money for North Carolinians who work, meet the criteria for the federal EITC, and file both a federal and State income tax return.

The EITC is a refundable credit, which means it is extra money an eligible person may receive in addition to a regular tax refund.  In the case of a person who owes state income taxes, the EITC may reduce that person’s tax bill.  

Who Is Eligible?

Qualifying for the State EITC is simple:

  • If you qualify for the federal credit, you qualify for the State credit.

Note: the criteria for the federal EITC (and therefore, the State EITC) are available from the IRS. We recommend that all questions about EITC eligibility be directed to the IRS.

Qualifying For The State EITC

Step 1: Determine your eligibility for the Federal EITC. Complete eligibility requirements and online assistance are available from the Internal Revenue Service at http://www.irs.gov/individuals/article/0,,id=150557,00.html.

Step 2: If you are eligible for the Federal EITC, you should complete and file a federal tax return. The IRS offers an EITC Assistant that can help you.

Step 3: Fill out the standard D-400 personal income tax return.

Step 4: Fill out and attach a D-400 TC to your completed D-400.

  • You can file your state forms electronically, or you can file by paper.
  • North Carolinians must complete these forms to receive their EITC even if they are not required to file a state return.

Watch Out For Common Errors

When you fill out your tax return, make sure you avoid these common errors:

  • Claiming a child who is not a qualifying child
  • Using incorrect social security numbers
  • Filing as “single” or “head of household” when married
  • Underreporting your income

Please note: if you file incorrectly and receive a refund in error, you will have to pay it back… with interest! Please make sure you file correctly.

Income Tax Help Available

Free tax assistance is available to people with low- to moderate incomes through the IRS’ Voluntary Income Tax Assistance Program (VITA). VITA volunteers can also help with state returns. Go to http://www.irs.gov/individuals/article/0,,id=107626,00.html for more information on the tax assistance programs available.

If you need help completing your State tax return, please call 1-877-252-3052.

For tax years beginning on or after January 1, 2014, this credit is no longer available.