Other Additions need to be included in the following cases:

• If you elected to exclude a lump-sum distribution from a retirement plan from your regular federal income tax computation and computed the tax separately, the amount of the lump-sum distribution must be included.
• If you carry over a net operating loss from another year to the 2009 return, an addition is required for the amount of net operating loss carried to the 2009 year that is not absorbed and will be carried forward to subsequent years.
• If you are a shareholder in an S Corporation that paid built-in gains tax for federal income tax purposes, you must add to federal taxable income your share of the built-in gains tax that the S Corporation paid.
• You must add to taxable income any amount that was contributed to North Carolina's National College Savings Program (NC 529 Plan) and deducted in a prior year that was later withdrawn and used for purposes other than the qualified higher education expenses of the designated beneficiary unless the withdrawal was due to the death or permanent disability of the designated beneficiary.
• If you qualified and elected to report your child's unearned income on your federal return, you included only the child's unearned income in excess of $1,900 in your federal taxable income. The difference in the child's standard deduction of $500 and the amount of his income not included in your federal taxable income must be added to your federal taxable income in figuring your North Carolina taxable income.

North Carolina did not adopt the additional first-year depreciation provisions in the federal Jobs Creation and Worker Assistance Act of 2002 or the federal Jobs and Growth Tax Relief Reconciliation Act of 2003. Instead, you were required to add back on the state return for 2002, 2003, and 2004 a certain percentage of the first-year depreciation claimed on the federal return for the applicable year. Any amount of additional first-year depreciation added to federal taxable income on your 2002, 2003, or 2004 State return may be deducted in five equal installments beginning with the tax return for 2005. Therefore, determine the amount of first-year depreciation added back on your 2002, 2003, and 2004 state returns, and enter 20% of the total in this field. This will be the final year you are allowed to take this deduction, as it's the fifth of the allowed five years to deduct the depreciation and all other installments of the deduction should have been taken previously.

Anyone who contributed to an account in the Parental Savings Trust Fund of the State Education Assistance Authority (North Carolina's National College Savings Program - NC 529 Plan) may take a deduction of up to $2,500 (or $5,000 if Married Filing Jointly), regardless of income level.

A long-term care insurance contract is any insurance contract under which the only insurance protection provided is for coverage of qualified long-term care services as defined in section 7720B of the Internal Revenue Code. Qualified long-term care services are those services required by a chronically ill individual and provided under a plan of care prescribed by a licensed health care practitioner.

Medical insurance premiums that you pay for general health care, hospitalization, or disability insurance do NOT qualify as premiums paid for a long-term care insurance contract.

No credit is allowed for payments that are deducted from, or not included in, your federal gross income for the taxable year. For example, payments that are not included in federal income are premiums paid through an employer-sponsored plan in which the payments are excluded from taxable wages (pre-taxed dollars). If you claimed a deduction for medical expenses on Federal Schedule A, Line 4, or if you claimed a deduction for self-employed health insurance premiums on Federal Form 1040, Line 29, you are not entitled to claim this credit. However, you may claim this credit for any premiums paid for long-term care insurance that are not deductible on your federal return because of the age limitations of the Internal Revenue Code.

You must have attended at least 36 hours of fire department drills and meetings or 36 hours of rescue squad training and meetings during 2009 to qualify for this deduction. In the case of a married couple filing a joint return, each spouse may qualify separately for the deduction, with the same requirements applicable for your spouse to take the deduction.

When income is taxed by North Carolina for a period during which you are a legal resident of North Carolina and the same income is also taxed by another state or country because it was earned in or derived from sources within that state or country, a tax credit may be claimed. You must have already filed a return with the other state or country to claim this credit.

The amount of net tax paid is any prepayment of tax (tax withheld, estimated tax payments, amount paid with extension, etc.) plus any additional tax paid or less any refunds received or expected to be received.

As a result of the North Carolina Supreme Court's decision in Bailey v. State of North Carolina, North Carolina may not tax certain retirement benefits received by retirees (or by beneficiaries of retirees) of the State of North Carolina and its local government or by the United States government retirees (including military). The exclusion applies to retirement benefits received from certain defined benefits plans, such as the North Carolina Teachers' and State Employees' Retirement System, the North Carolina Local Governmental Employees' Retirement System, the North Carolina Consolidated Judicial Retirement System, the Federal Employees' Retirement System, or the United States Civil Service Retirement System, if the retiree had five or more years of creditable service as of August 12, 1989. The exclusion also applies to retirement benefits received from the State's 401 (k) and 457 plans if the retiree had contributed or contracted to contribute to the plan prior to August 12, 1989. The exclusion does not apply to retirement benefits paid to former teachers and state employees of other states and their political subdivisions.

A retiree entitled to exclude retirement benefits in arriving at North Carolina taxable income should claim a deduction on line 46 of the D-400 for the amount of excludable retirement benefits included in federal taxable income. A copy of Form 1099-R or W-2 received from the payer must be attached to the return to support the deduction.

Distributions from most types of retirement plans may be rolled over into another retirement plan or into an IRA. Because rollover distributions lose their character upon rollover, all distributions from a qualifying Bailey retirement account in which the employee / retiree was vested as of August 12, 1989, are exempt from State income tax regardless of the source of the funds contained in the account. Conversely, qualifying tax-exempt Bailey benefits rolled over into another retirement plan lose their character and would not be exempt upon distribution from the other plan unless the plan is a qualifying Bailey retirement account in which the employee was vested as of August 12, 1989.

Rollovers to IRAs will always result in a loss of tax-exempt status since IRAs do not qualify under the Bailey settlement.

An individual owes consumer use tax on an out-of-state purchase when the item purchased is subject to North Carolina sales tax, and the retailer making the sale does not collect sales tax on the sale or the state sales tax rate imposed by the other state is less than the state sales tax rate imposed by North Carolina.

Examples of items that are subject to the consumer use tax include computer and other electronic equipment, software, books, audio and video tapes, compact discs, records, clothing, appliances, furniture, sporting goods, and jewelry. Out-of-state retailers include mail-order companies, television shopping networks, and firms selling over the internet.

If you claimed the Standard Deduction on your federal return, you may claim a credit on your North Carolina return for charitable contributions you made during the year to a qualified organization. You may not claim the credit if you claimed itemized deductions on your federal return. The credit may not be claimed for contributions for which credits for certain real property donations, gleaned crops, or recycling oyster shells are claimed. This credit may not exceed the tax liability for the tax year, reduced by other tax credits.

The use tax is calculated at the same rate as the sales tax.

For January 1, 2009 through August 31, 2009, the rate was 7.25% in Mecklenburg County, 7% in Alexander, Catawba, Cumberland, Haywood, Martin, Pitt, Sampson, and Surry Counties, and 6.75% in all other counties.

For September 1, 2009 through December 31, 2009, the rate was 8.25% in Mecklenburg County, 8% in Alexander, Catawba, Cumberland, Haywood, Martin, Pitt, Sampson, and Surry counties, and 7.75% in all other counties.

If you paid another state's sales or use tax on out-of-state purchases, that amount may be credited against the North Carolina use tax due. You may not claim a credit for sales tax or value-added tax paid to another country.

• Enter any estimated tax payments you made for 2009.
• Enter any amounts credited from your 2008 return.
• Enter any amount prepaid with extension requests.

Do NOT enter any amount of your 2009 North Carolina Income Tax withheld by your employer(s) as shown on any wage or tax statements.

"Stay on pay" does not qualify for the deduction. Severance wages do not include payments that represent compensation for past or future services. Compensation for past or future services include payment for accumulated sick leave, vacation time, other unused benefits, bonuses based on job performance, or payments in consideration of any agreement not to compete.