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North Carolina taxes at a glance (2026)

North Carolina has a flat 3.99% income tax with a standard deduction of $12,750 (single) / $25,500 (married). Flat individual income tax of 3.99% for tax year 2026 on all taxable income (down from 4.25% in 2025, 4.50% in 2024); Jan 1, 2026 was the final step of the rate phasedown enacted under S.L. 2023-134. Further automatic reductions (toward 3.49% in 2027 and lower in later years) occur only if state revenue triggers are met. Standard deduction: $12,750 single/MFS, $25,500 married filing jointly/surviving spouse, $19,125 head of household (confirmed unchanged for 2026 by NCDOR and Tax Foundation; a proposed increase to $13,000/$26,000 under S437 'Middle Class Momentum Act' is NOT enacted — still pending in committee). No personal exemptions. No local or city income taxes anywhere in NC. Social Security benefits are fully exempt. Other retirement income (pensions, 401k, IRA) is generally taxable, except qualifying federal/state/military retirement under the Bailey settlement is fully exempt. NC has no separate capital gains rate (taxed as ordinary income at the flat rate).