17 N.C. Admin Code 06B .4004 - Tax Credits

If part of the S corporation's income is earned within and taxed by another state, either to the individual or to the corporation, a resident shareholder is entitled to a tax credit on the individual or the estates and trusts income tax return for the share of the tax paid to the other state.  A shareholder claiming the tax credit must attach a schedule to the income tax return reflecting the total amount of tax paid to the State by the S corporation, and explaining how  the shareholder's pro rata share of the tax was determined.  Nonresident shareholders are not allowed credit for tax paid to another state.