NC S857

Creates a $2,500 per dependent child income tax credit for taxpayers with children in private schools who received federal COVID-19 stimulus payments and experienced at least a 10% income decline, with income thresholds of $150,000 (married filing jointly), $112,500 (head of household), or $75,000 (other filers).

Establishes a $500 per dependent child income tax credit for homeschooled children under the same eligibility requirements, with the credit reduced by $20 per $1,000 of income exceeding the threshold.

Caps the private school credit at $7,500 and homeschool credit at $1,500 per taxable year, and allows unused portions to carry forward for three years.

Allows pro rata credit allocation for dependent children who split attendance between private schools and homeschools during the specified periods (spring and fall semesters of tax year plus spring semester through April 15 of following year).

Permits deduction of up to $2,500 in bonus compensation and overtime pay earned between March 28 and December 31, 2020, for eligible taxpayers who received CARES Act stimulus payments and meet income thresholds.