Does Turbotax for ty2018 allow North Carolina itemized deductions when using standard deductions for the Federal?

[aebrells]

North Carolina  for tax year 2018 is allowing itemized deductions even when the federal is filed standard.  Last year NC did not allow this.  I wondered if Turbotax Deluxe is allowing this and allowing it to be efiled.  This is extra important because NC requires QCDs to be added back to income, and allows them to be added to  charitable deductions. 

[SteamTrain · Accepted solution]

YES...IT does and I've already tried it..(with a couple "But"s)

• Yes..NC does...I've prepared a couple test tax returns that are Std Ded Fed and it itemizes on NC automatically (if larger than NC StdDed )
  ......BUT#1....
   You need to enter all your other deductions in the Federal Deductions&Credits section first.....all the usual deductions transfer from there.
• ...BUT#2.......and IF you did a QCD again this year, the NC tax return doesn't quite pick that up properly as an itemized NC deduction until you run thru the entire NC tax return Q&A.....and then you still have to go thru the NC error check, where a page pops up and asks again for the exact amount of the QCD.  At which point it gets applied to NC itemized deductions 

[aebrells]

Is this still true?  will Turbotax fix this soon do you think?

[SteamTrain]

I have no idea...you put it in....in the Federal section as usual, then when you eventually go thru the NC section, you do everything ther..and then the final QCD entry will go in during the NC error check...  then it will be correct.

[SteamTrain]

@aebrells

Actually, it looks like they did fix it.  I Had to delete my NC tax return, then re-start it and it then asks the proper questions about the QCD as a part of the NC interview.

[atom]

For NC, then it sounds then like the QCD gets counted twice.  First on the Federal return, the QCD reduces the amount on line 7, 1040 (line is the AGI); this number is carried over to the NC return.  Then the QCD gets used as a deduction on the NC return.  Am I right?

[SteamTrain]

Not quite....Correct It is taken off the FED so the Fed AGI is Without QCD

1)  NC brings in the Fed AGI
2 ) then the QCD is added back  to NC income (line 5 of the NC SCH S)
3)  Then the QCD is added to charity deductions on line  20 of the NC SCH S,  to take it back off as part of NC itemized deductions...so it ends up effectively the same as Fed AGI, as long as NC itemized deductions can be used.

Except....that sometimes the QCD plus other allowed NC itemized deductions are too small, and NC Std Ded is used...so then your QCD is added back to FED AGI, and never removed again....but that's the way NC legislature putzed with it.
.

[atom]

Thanks for the correction, Stream Train.  It makes sense that QCD total might be added back on line 5; I didn't know that because I did use QCD this year.  But the canceling out of the line 5 addition of QCD number against the QCD as a NC deduction does mean that the QCD total, which is embedded in Federal AGI, is carried over to one's NC situation.  Of course, one does have to itemize on NC for this to occur.  

In the future I'm unlikely to itemize on the Federal or the NC, except occasionally when I have lots of deductions, likely due to my periodic funding of a donor-advised fund.