EARNED INCOME TAX CREDIT (EITC)

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

Latest Legislative Action:

• A bill was introduced in the 2025 session to restore the state’s EITC.
• 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)

North Carolina does not currently offer a state CTC however, it does offer a Child Deduction.

Rate:

• For spouses filing jointly with a combined adjusted gross income of up to $40,000: $3,000
• For spouses filing jointly with a combined adjusted gross income between $40,000 and $60,000: $2,500
• For spouses filing jointly with a combined adjusted gross income between $60,000 and $80,000: $2,000
• For spouses filing jointly with a combined adjusted gross income between $80,000 and $100,000: $1,500
• Income thresholds are 20% lower for individuals filing as head of household and 50% lower for both single taxpayers and spouses filing separately.

Eligibility: G.S. §105-153.5(a1)  Allows taxpayer a deduction for each qualifying child for whom the taxpayer is allowed a federal child tax credit under section 24 of the Internal Revenue Code.

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.