Bill Summary for H 40 (2015-2016)

Bill: IRC UPDATE.

Summary date: 

Feb 3 2015

Bill Information:

View NCGA Bill Details2015-2016 Session
House Bill 40 (Public) Filed Tuesday, February 3, 2015
AN ACT TO UPDATE THE REFERENCE TO THE INTERNAL REVENUE CODE AND TO DECOUPLE FROM CERTAIN PROVISIONS OF THE FEDERAL TAX INCREASE PREVENTION ACT OF 2014.
Intro. by Howard, W. Brawley, Lewis, Setzer.

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Bill summary

Identical to S 20, filed 2/3/15.
 
Under current law, North Carolina’s tax law tracks many of the provisions of the federal Internal Revenue Code (IRC) by reference to the IRC. 
 
Amends GS 105-228.90(b)(1b) to update the reference to the IRC from December 31, 2013 to January 1, 2015, thereby including any provisions of the IRC enacted as of January 1, 2015 that became effective before or after that date.
 
Decouples North Carolina’s tax law from extensions under the federal Tax Increase Prevention Act of 2014 (TIPA) for the 2014 tax year. Amends GS 105-130.5B(c) and GS 105-153.6(c), regarding the adjustments made when the state decouples from federal accelerated depreciation and expensing, to provide that for the 2014 tax year, North Carolina tax law sets the deduction and investment limits of the enhanced section 179 expensing provision at $25,000 and $200,000. 
 
Amends GS 105-153.5, enacting new subsection (d) which provides that North Carolina tax law does not conform to the extension of: (1) the income exclusion for the discharge of qualified residence indebtedness as provided under the IRC; (2) the deduction for mortgage insurance premiums as interest for tax year 2014; and (3) the federal qualified tuition and expenses deduction for tax year 2014. Additionally, this act provides that North Carolina’s tax law does not conform with the IRC provision authorized in 2006 that allows taxpayers who are age 70 ½ or older to contribute up to $100,000 from their IRA to a charity tax free. Effective for taxable years beginning on or after January 1, 2014.
 
Provides that any amendments to the IRC enacted after December 31, 2013, that increase North Carolina taxable income for the 2014 taxable year, become effective for taxable years beginning on or after January 1, 2015.

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