My tenant is moving after 2+ yrs. The house needs painting and the carpet in 1 room will need to be replaced. Can I deduct this from their deposit, what is considered normal wear and tear?

Paint, in my opinion, generally falls under "normal wear and tear". I understand in some states, you are REQUIRED to paint between tenants; so unless there is excessive wall damage (lots of holes that need patching) I'd let it go.

The carpet on the other hand, it depends. Was it new when they moved in? Why does it need replaced? Could it be cleaned and be acceptable to a new tenant? If they potty trained a puppy in there, or spilled bleach all over the room, that's beyond wear and tear. But if it is simple wear patterns and a little bit of staining that a good professional cleaning would take care of, again, I'd let it go.

Remember, 2+ years is a long time in a house; if everything was not top notch when they moved in, age is going to start to show (cheap carpet, bad initial paint job).