Tax Bill Approved by N.C. House Saves Taxpayers $18 Million With Increased Medical Expense Deductions

Raleigh, N.C. – Legislation to reduce the threshold amount for the North Carolina medical and dental expense deduction from 10% to 7.5% for the 2019 and 2020 taxable years passed the state House of Representatives on Tuesday by a 118-0 vote. 

Senate Bill 622 Reduce Threshold/Medical Expense Deduction updates the state’s revenue code for purposes of medical and dental expense deductions only to January 1, 2020.  The higher medical and dental expense threshold is expected to save taxpayers approximately $18 million each year. 

The legislation ‘couples’ North Carolina’s revenue code with a federal tax provision approved by the U.S. Congress and signed by President Trump in the Taxpayer Certainty and Disaster Relief Act of 2019. 

Senior House Finance Committee Co-Chair Rep. Julia Howard (R-Davie) said the bill saves money for taxpayers who spend a substantial amount of income on medical expenses, and avoids an inconvenience for them at filing.  

“This legislation saves taxpayers money, and prevents them from having to file an amended income tax return or request an extension,” Rep. Howard said Tuesday. 

“Taking care of this reform now enhances the deduction for people with particularly high medical expenses and avoids an inconvenience for those taxpayers at filing.”