NC H325

Reenacts the credit for child care and certain employment-related expenses under G.S. 105-153.11, effective for taxable years beginning January 1, 2015.

Allows taxpayers who claim a federal child care credit under Internal Revenue Code Section 21 to claim a corresponding North Carolina state tax credit based on applicable percentages ranging from 7% to 13% depending on filing status and adjusted gross income.

Limits the amount of employment-related expenses eligible for the credit to $3,000 for one qualifying individual or $6,000 for more than one qualifying individual, reduced by any employer-provided dependent care assistance excluded from gross income.

Applies different percentage rates (Percentage A and B) based on whether expenses relate to dependents age seven and older who are not physically or mentally incapable of self-care, versus other qualifying individuals.

Requires nonresident or part-year residents to reduce the credit amount proportionally and prohibits credits exceeding tax liability or amounts already deducted from North Carolina taxable income.