North Carolina State Income Tax 2026
North Carolina's flat income tax rate dropped to 3.99% on January 1, 2026, continuing a multi-year reduction trajectory from 4.5% in 2024. Combined with a generous standard deduction ($12,750 single, $25,500 MFJ) and no local income tax, North Carolina has become an increasingly competitive state for relocation.
2026 rate cut: 4.25% to 3.99%
North Carolina's flat rate dropped to 3.99% on January 1, 2026. The path: 2022 4.99% → 2023 4.75% → 2024 4.5% → 2025 4.25% → 2026 3.99%. The 2022 reform legislation set further reductions conditional on revenue triggers.
North Carolina 2026 Quick Facts
| Tax type | Flat 3.99% (2026) |
| Previous rate (2024) | 4.5% |
| Standard deduction (single) | $12,750 |
| Standard deduction (MFJ) | $25,500 |
| Local income tax | None |
| Reciprocity agreements | None |
| Social Security taxed | No |
| Bailey pension (pre-1989) | Exempt |
| 2026 changes | Rate cut from 4.25% to 3.99% |
2026 North Carolina Income Tax Brackets
| Rate | Single Filer Income | Married Filing Jointly |
|---|---|---|
| 3.99% | All taxable income | All taxable income |
Sources: North Carolina Department of Revenue (ncdor.gov), NC General Assembly tax reform legislation, Tax Foundation. Data verified May 2026.
North Carolina Effective Rate Calculator
Standard deduction: $12,750 applied before tax calculation.
Effective Rate
3.31%
State Tax Due
$2,484
Marginal Bracket
3.99%
State income tax only. Does not include federal income tax, Social Security, Medicare, or local income tax. Calculations are estimates for educational purposes. Verify with a licensed CPA before filing.
What You Actually Pay: Worked Examples
$50,000 income
$75,000 income
$100,000 income
$250,000 income
Single filer, standard deduction. Does not include federal tax, Social Security, or Medicare.
Local Income Tax in North Carolina
North Carolina does not have a personal local income tax. Charlotte, Raleigh, Greensboro, Durham, Winston-Salem and other NC cities do not levy an additional income tax on residents or workers.
The state's flat 3.99% rate is the only income tax. With the generous standard deduction, this gives NC one of the simpler tax-filing experiences combined with one of the lower flat rates among states that tax income.
See the full local income tax guide for all US cities →North Carolina Filing Requirements
Residents: File North Carolina Form D-400 if gross income exceeds the filing threshold. Residents are taxed on all income.
Part-year residents: File Form D-400 marked as part-year for the portion of the year you lived in NC.
Non-residents: File Form D-400 marked as non-resident for NC-source income.
Bailey settlement: Government, federal and military retirees with vested benefits before August 12, 1989 may exempt that pension income from NC tax (the "Bailey class").
Filing deadline: April 15. Extensions available.
Retirement Income Treatment in North Carolina
| Social Security benefits | Exempt | North Carolina does not tax Social Security |
| Traditional pension income | Taxed | Taxed at flat 3.99% as ordinary income |
| Government pension (Bailey class) | Exempt | Exempt for those vested before August 12, 1989 |
| Government pension (post-1989) | Taxed | Taxed at flat 3.99% as ordinary income |
| Military pension | Exempt | Fully exempt from NC state income tax since 2021 |
| 401(k) and IRA withdrawals | Taxed | Taxed at flat 3.99% as ordinary income |
| Roth IRA withdrawals | Exempt | Qualified distributions are tax-free |
North Carolina is reasonably retirement-friendly: SS and military pension fully exempt, the Bailey settlement covers many federal and state retirees, and the flat 3.99% rate is moderate. Traditional pensions and 401(k) for non-Bailey retirees are taxed. See the full 50-state retirement income scorecard.
North Carolina Income Tax: FAQs
What is North Carolina's income tax rate for 2026?
Does North Carolina have a local income tax?
Does North Carolina tax Social Security?
What is North Carolina's standard deduction?
Will North Carolina's rate keep dropping?
Sources: North Carolina Department of Revenue (ncdor.gov), NC General Assembly tax reform legislation, Tax Foundation. Data verified May 2026. Not tax advice. Always confirm current figures with the North Carolina Department of Revenue or a licensed CPA or Enrolled Agent before filing.