S726 - Internal Revenue Code (IRC) Update. (SL 2016-6)

Overview: S.L. 2016-6, as amended by Sec. 1.2 of S.L. 2016-92, updates from January 1, 2015, to January 1, 2016, the reference to the Internal Revenue Code used in determining certain State tax provisions. The act does not conform to the extensions listed below under the federal Protecting Americans from Tax Hikes Act of 2015 (PATH Act), but it does conform to the $250 teacher expense deduction and to the income exclusion for amounts received by wrongfully incarcerated individuals.

The act does not conform to the following two provisions that were made permanent at the federal level:

• Enhanced Section 179 expensing.
• Tax-free distribution from IRAs to public charities.

The act does not conform to the following three provisions that were extended at the federal level through the 2016 taxable year:

• Deduction for higher education tuition expenses.
• Exclusion from income for forgiveness of debt on principal residence.
• Deduction for mortgage insurance premiums.

This act became effective on June 1, 2016. North Carolina has decoupled from the above-named provisions for taxable years beginning on or after 2013.