It's fine if your taxable income on line 14 of Form D-400 is negative. Rest assured that the state program is working as intended.
According to Line 14 – North Carolina Taxable Income in the North Carolina Individual Income Tax Instructions:
If North Carolina taxable income is negative, enter the amount on Line 14 and fill in the circle next to the line to indicate the amount is negative.
Form D-400 starts with your federal AGI, then includes additions to and deductions from federal AGI. Then you claim a child deduction, if eligible, and either the state standard deduction or itemized deductions to arrive at Your North Carolina taxable income.
