The North Carolina individual income tax return includes a standard deduction adjustment because the IRS allows a larger standard deduction than the State. If you claimed the standard deduction or itemized deductions on your federal return you must make this adjustment. It will become part of the total line 7 amount on your North Carolina Form D-400. Your federal standard deduction or itemized deductions amount has already been subtracted in the amount you entered as the starting point on your North Carolina return. If you claimed itemized deductions on your federal return and included state and local income taxes or state and local general sales taxes in itemized deductions on Federal Schedule A, you must make this adjustment. You cannot take a deduction for state and local taxes or state and local general sales taxes on your North Carolina return.

Your adjustment amount depends on your filing status and whether you claimed the standard deduction or itemized deductions on your federal return. Select one of the next two options for further instructions:

• D-400 filers claiming the standard deduction on your federal return
• D-400 filers claiming itemized deductions on your federal return

Last modified on: 10/31/07 03:53:17 PM.