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Referencing North Carolina income tax form D-400TC, Part 1 seriously limits the amount of foreign tax credit (FTC) I can take (line 7a is considerably smaller than line 6).

I am wondering if it is possible, as with the federal FTC, to carry over the unused amount. Part 1 says nothing about it. However, the line 7a amount is carried to Part 3, where it is added to "Tax credits carried over from previous year". But nowhere in the instructions for this form, or at the NC DOR website, can I find any discussion of what qualifies as a carried-over tax credit, in particular, does the unused FTC count ? enter image description here

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  • I guess I should be grateful to get any credit from the state at all; apparently all states do not provide a FTC. It's almost like I'm double dipping - charged for the credit once (deducted from fund's dividends) but get a credit twice, once on federal return, once on state return ! Commented Mar 21, 2021 at 1:02
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    It isn't double dipping. In each case, you only get back the tax percentage on that amount -- just as you pay tax at both levels without being double-taxed.
    – keshlam
    Commented Apr 10, 2023 at 15:42

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Apparently the answer is no. From a tax forum: Section 105-151 of the NC Code, which is the relevant statute, contains no provision for carryover.

https://www.ncleg.net/EnactedLegislation/Statutes/HTML/BySection/Chapter_105/GS_105-151.html

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