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Returning Member
posted Feb 21, 2026 1:27:40 PM

North Carolina interest expense

Our federal return has interest on form 4952. The D-400 instructions say that all interest is carried to the state return from the federal return, combined on the same line. This does not appear to be happening.

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1 Replies
Employee Tax Expert
Feb 22, 2026 10:11:59 AM

North Carolina does not have a state itemizable deduction for federal investment interest expense from Schedule A. Looking at D-400 Schedule A for North Carolina itemized deductions, it appears N.C. only permits these specific line items in the itemized deductions total:

5. Home Mortgage Interest and Real Estate Property Taxes After Limitation 

6. Charitable Contributions (See instructions) 

7. d. Medical and Dental Expenses After Limitation

8. Repayment of Claim of Right Income