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. Enacted June 1, 2016. Effective June 1, 2016, except as otherwise provided.
Bill Summaries: S 726 IRC UPDATE.
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Tracking:
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Bill S 726 (2015-2016)Summary date: Jun 3 2016 - View Summary
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Bill S 726 (2015-2016)Summary date: May 24 2016 - View Summary
Conference report makes the following changes to the 3rd edition.
Provides that the House recedes from Amendment #2, adopted on May 4, 2016, which deleted language concerning qualified tuition and related expenses and replaced it with requirements that for the taxable years of 2015 and 2016, a taxpayer must add to their adjusted gross income the amount excluded from the taxpayer's gross income for the discharge of qualified principal residence indebtedness under section 108 of the Code unless the discharge of qualified principal indebtedness is for either of the specified reasons concerning contamination. Therefore, the conference report adopts the second edition of the act, as engrossed on April 28, 2016.
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Bill S 726 (2015-2016)Summary date: May 4 2016 - View Summary
House Amendment makes the following changes to the 2nd edition. Deletes the amendments to GS 105-153.5(c2)(1) and reinstates the existing language. Instead, adds that, for the taxable years of 2015 and 2016, a taxpayer must add to their adjusted gross income the amount excluded from the taxpayer's gross income for the discharge of qualified principal residence indebtedness under section 108 of the Code unless the discharge of qualified principal indebtedness is for either of the following: (a) residential property with contamination that resulted from the discharge of petroleum from an underground storage tank used to store fuel for noncommercial purposes, and for which no funds have been received from the Noncommercial Leaking Petroleum Underground Storage Tank Cleanup Fund as reimbursement of costs expended in association with cleanup of the contamination on the property, or (b) residential property with contamination that resulted from the migration of contaminants from another property under separate ownership, if the property owner did not cause or contribute to the contamination present on their property.
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Bill S 726 (2015-2016)Summary date: Apr 27 2016 - View Summary
Senate amendment makes the following changes to the 1st edition.
Amends GS 105-153.5(c2) concerning qualified tuition and related expenses, ensuring that North Carolina is decoupled from the IRC for taxable years 2014, 2015, and 2016 (previously, only included 2014).
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Bill S 726 (2015-2016)Summary date: Apr 25 2016 - View Summary
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 January 1, 2015 to January 1, 2016, thereby including any provisions of the IRC enacted as of January 1, 2016 that became effective before or after that date.
Decouples North Carolina's tax law from certain provisions of the Federal Protecting Americans from Tax Hikes Act of 2015, more specifically this bill decouples from the permanent extension of the enhanced section 179 expensing provision. 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, providing that for tax years beginning on or after 2013, North Carolina sets the deduction and investment limits of the enhanced section 179 expensing provision at $25,000 and $200,000.
Amends GS 105-153.5(a)(2) to provide that North Carolina tax law does not conform to the extension of: (1) charitable contribution provisions of the IRC that allows taxpayers that are 70 1/2 or older to deduct qualified charitable distributions from an individual retirement plan for years on or after 2014, (2) the deduction for mortgage insurance premiums as interest for tax year 2014, 2015, 2016.
Also amends GS 105-153.5(c2) to decouple from the IRC for (1) qualified principal residence indebtedness, (2) qualified tuition and related expenses, and (3) qualified charitable distributions from individual retirement plans by a person age 70 1/2 or older, for taxable years 2014, 2015, and 2016. Adds new subdivision (4) which decouples North Carolina from federal exclusion from income any amount received as a result of being wrongfully incarcerated, for taxable years before 2014.
Amends GS 015-241.6(b) by adding that if a request for a refund of an overpayment of tax under Section 139F of the Code (concerning wrongfully incarcerated individuals) for a taxable year prior to 2016 is barred, the refund may be allowed if the claim for the refund is filed by December 18, 2016. Expires December 19, 2016.
Provides that any amendments to the IRC enacted after January 1, 2015, that increase North Carolina taxable income for the 2015 taxable year, become effective for taxable years beginning on or after January 1, 2016.