Vacation House and State Return

[DANCVA]

My primary residence in North Carolina is paid for. We bought a vacation home in Virginia. I understand that I can deduct the mortgage interest on my federal return. What about my North Carolina return? 

If I can't deduct it, how do I remove it from my NC return?

Since we don't earn money on the Virginia home, we don't have to file a state return there do we?

[DavidD66]

You can deduct your mortgage interest on your North Carolina return.  According to the North Carolina Department of Revenue:

If you itemized deductions on your federal return, you may claim either the North Carolina standard deduction or North Carolina itemized deductions.  North Carolina itemized deductions are not identical to federal itemized deductions and are  subject to certain limitations.  Specifically, no itemized deductions included on federal Form 1040, Schedule A are allowed as North Carolina itemized deductions except qualified home mortgage interest, real estate property taxes, charitable contributions, medical and dental expenses, and repayment of claim of right income. 

For more information, see North Carolina Standard Deduction or North Carolina Itemized Deductions

If your property in Virginia is not a rental, you do not need to file a Virginia state tax return.