Bill Text: NC H994 | 2015-2016 | Regular Session | Amended
Bill Title: IRC Update
Spectrum: Partisan Bill (Republican 6-0)
Status: (Introduced - Dead) 2016-04-28 - Ref To Com On Finance [H994 Detail]
Download: North_Carolina-2015-H994-Amended.html
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2015
H 1
HOUSE BILL 994*
Short Title: IRC Update. |
(Public) |
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Sponsors: |
Representatives Brody, Dixon, Langdon, and Steinburg (Primary Sponsors). For a complete list of sponsors, refer to the North Carolina General Assembly web site. |
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Referred to: |
Finance |
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April 28, 2016
A BILL TO BE ENTITLED
AN ACT to update the reference to the internal revenue code and to decouple from certain provisions of the federal protecting americans from tax hikes act of 2015, AS RECOMMENDED BY THE AGRICULTURE AND FORESTRY AWARENESS STUDY COMMISSION.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 105‑228.90(b)(1b) reads as rewritten:
"(1b) Code. – The Internal
Revenue Code as enacted as of January 1, 2015, January 1, 2016, including
any provisions enacted as of that date that become effective either before or
after that date."
SECTION 2.(a) G.S. 105‑130.5B(c) reads as rewritten:
"(c) Section 179 Expense.
– For purposes of this subdivision, the definition of section 179 property has
the same meaning as under section 179 of the Code as of January 1, 2015. January
1, 2016. A taxpayer who places section 179 property in service during a
taxable year listed in the table below must add to the taxpayer's federal
taxable income eighty‑five percent (85%) of the amount by which the taxpayer's
expense deduction under section 179 of the Code exceeds the dollar and
investment limitation listed in the table below for the taxable year.
A taxpayer is allowed to deduct twenty percent (20%) of the add‑back in each of the first five taxable years following the year the taxpayer is required to include the add‑back in income.
Taxable Year of Dollar Limitation Investment Limitation
85% Add‑Back
2010 $250,000 $800,000
2011 $250,000 $800,000
2012 $250,000 $800,000
2013 $25,000 $200,000
2014 $25,000 $200,000
2015 $25,000 $200,000"
SECTION 2.(b) G.S. 105‑153.6(c) reads as rewritten:
"(c) Section 179 Expense.
– For purposes of this subdivision, the definition of section 179 property has
the same meaning as under section 179 of the Code as of January 1, 2015. January
1, 2016. A taxpayer who places section 179 property in service during a
taxable year listed in the table below must add to the taxpayer's federal
taxable income or adjusted gross income, as appropriate, eighty‑five
percent (85%) of the amount by which the taxpayer's expense deduction under
section 179 of the Code exceeds the dollar and investment limitation listed in
the table below for that taxable year. For taxable years before 2012, the
taxpayer must add the amount to the taxpayer's federal taxable income. For
taxable year 2012 and after, the taxpayer must add the amount to the taxpayer's
adjusted gross income.
A taxpayer is allowed to deduct twenty percent (20%) of the add‑back in each of the first five taxable years following the year the taxpayer is required to include the add‑back in income.
Taxable Year of Dollar Limitation Investment Limitation
85% Add‑Back
2010 $250,000 $800,000
2011 $250,000 $800,000
2012 $250,000 $800,000
2013 $25,000 $200,000
2014 $25,000 $200,000
2015 $25,000 $200,000"
SECTION 3. G.S. 105‑153.5(a)(2) reads as rewritten:
"(2) Itemized deduction amount. – An amount equal to the sum of the items listed in this subdivision. The amounts allowed under this subdivision are not subject to the overall limitation on itemized deductions under section 68 of the Code:
a. Charitable Contribution.
– The amount allowed as a deduction for charitable contributions under section
170 of the Code for that taxable year. For taxable year 2014, years
beginning on or after 2014, a taxpayer who elected to take the income
exclusion under section 408(d)(8) of the Code for a qualified charitable
distribution from an individual retirement plan by a person who has attained
the age of 70 1/2 may deduct the amount that would have been allowed as a
charitable deduction under section 170 of the Code had the taxpayer not elected
to take the income exclusion.
b. Mortgage Expense and
Property Tax. – The amount allowed as a deduction for interest paid or accrued
during the taxable year under section 163(h) of the Code with respect to any
qualified residence plus the amount allowed as a deduction for property taxes
paid or accrued on real estate under section 164 of the Code for that taxable
year. For taxable year 2014, years 2014, 2015, and 2016, the amount
allowed as a deduction for interest paid or accrued during the taxable year
under section 163(h) of the Code with respect to any qualified residence shall
not include the amount for mortgage insurance premiums treated as qualified
residence interest. The amount allowed under this sub‑subdivision may not
exceed twenty thousand dollars ($20,000). For spouses filing as married filing
separately or married filing jointly, the total mortgage interest and real
estate taxes claimed by both spouses combined may not exceed twenty thousand
dollars ($20,000). For spouses filing as married filing separately with a joint
obligation for mortgage interest and real estate taxes, the deduction for these
items is allowable to the spouse who actually paid them. If the amount of the
mortgage interest and real estate taxes paid by both spouses exceeds twenty
thousand dollars ($20,000), these deductions must be prorated based on the
percentage paid by each spouse. For joint obligations paid from joint accounts,
the proration is based on the income reported by each spouse for that taxable
year.
c. Medical and Dental Expense. – The amount allowed as a deduction for medical and dental expenses under section 213 of the Code for that taxable year."
SECTION 4. G.S. 105‑153.5(c2) reads as rewritten:
"(c2) Decoupling Adjustments. – In calculating North Carolina taxable income, a taxpayer must add to the taxpayer's adjusted gross income any of the following items that are not included in the taxpayer's adjusted gross income:
(1) For taxable year 2014,
years 2014, 2015, and 2016, the amount excluded from the taxpayer's
gross income for the discharge of qualified principal residence indebtedness
under section 108 of the Code. The purpose of this subdivision is to decouple
from the extension of the income exclusion under section 102 of the
Tax Increase Prevention Act of 2014.available under federal tax law.
(2) For taxable year 2014,
the amount of the taxpayer's deduction for qualified tuition and related
expenses under section 222 of the Code. The purpose of this subdivision is to
decouple from the extension of the federal above‑the‑line
deduction under section 107 of the Tax Increase Prevention Act of 2014.available
under federal tax law.
(3) For taxable year 2014,
years beginning on or after 2014, the amount excluded from the
taxpayer's gross income for a qualified charitable distribution from an
individual retirement plan by a person who has attained age 70 1/2 under
section 408(d)(8) of the Code. The purpose of this subdivision is to decouple
from the extension of the income exclusion under section 108 of the
Tax Increase Prevention Act of 2014.available under federal tax law.
(4) For taxable years prior to 2014, the amount excluded from the taxpayer's gross income for amounts received by a wrongfully incarcerated individual under section 139F of the Code for which the taxpayer took a deduction under former G.S. 105‑134.6(b)(14). The purpose of this subdivision is to prevent a double benefit where federal tax law provides an income exclusion for income for which the State previously provided a deduction."
SECTION 5.(a) G.S. 105‑241.6(b) is amended by adding a new subdivision to read:
"(6) Wrongfully Incarcerated Individuals. – If a request for a refund of an overpayment of tax under section 139F of the Code for a taxable year prior to 2016 is barred by the operation of any law or rule of law, the refund may nevertheless be allowed if the claim for the refund is filed by December 18, 2016."
SECTION 5.(b) This section expires January 1, 2017.
SECTION 6. Except as otherwise provided, this act is effective when it becomes law. Notwithstanding Section 1 of this act, any amendments to the Internal Revenue Code enacted after January 1, 2015, that increase North Carolina taxable income for the 2015 taxable year are effective for taxable years beginning on or after January 1, 2016.