North Carolina has a flat 3.99% state income tax on all income for 2026, one of the most competitive rates in the nation. This is the result of aggressive tax reform: NC had a progressive system with a 7.75% top rate in 2013, switched to flat tax in 2014, and has steadily reduced the rate: 5.8% (2014) → 5.75% (2015) → 5.499% (2017) → 5.25% (2019) → 4.99% (2022) → 4.25% (2025) → 3.99% (2026). Further cuts toward 3.49% are possible under current law. No local income tax anywhere in the state.
Why such low taxes? North Carolina embarked on a pro-growth tax reform strategy in 2013 to compete with zero-tax neighbors Florida and Tennessee. The state reduced income tax rates, eliminated the estate tax, and simplified the tax code. The strategy worked: NC's economy boomed with Research Triangle (tech/pharma) and Charlotte (financial services) attracting businesses and high earners fleeing high-tax states.
How it compares:
Economic success: Since 2013 tax reform, NC has seen massive population growth (about +0.9M residents 2010-2020), booming tech sector (Research Triangle), and Charlotte becoming the 2nd-largest banking center in the US after NYC. The low, steadily-declining flat tax (now 3.99%) is credited as a major driver.
Source: North Carolina Department of Revenue - Individual Income Tax
Here's what North Carolina residents actually pay at different income levels (2026, single filer, standard deduction):
| Annual Income | Federal Tax | State Tax | Total Tax | Take-Home Pay | Effective Rate |
|---|---|---|---|---|---|
| $50,000 | $3,820 | $1,486 | $5,306 | $44,694 | 10.6% |
| $75,000 | $7,670 | $2,484 | $10,154 | $64,846 | 13.5% |
| $100,000 | $13,170 | $3,481 | $16,651 | $83,349 | 16.7% |
| $150,000 | $24,734 | $5,476 | $30,210 | $119,790 | 20.1% |
| $250,000 | $51,304 | $9,466 | $60,770 | $189,230 | 24.3% |
Note: Includes federal and state income tax only. Does not include FICA (Social Security/Medicare), which adds 7.65% for employees.
Key takeaway: At $100K, North Carolina takes $3,481 in state tax alone.
CountryTaxCalc.com is reader-supported. When you use our partner links, we may earn a commission at no cost to you. This helps us provide free tax calculators and comparison tools.Learn more about our affiliate partnerships
★ 4.8verified reviews · 3,758 reviews
Planning a move to or from North Carolina? Multi-state filing is complex. Get matched with a CPA who handles North Carolina taxes and multi-state returns. Virtual meetings, fixed pricing.
⚠ Not for simple single-state returns. Free filing is fine for straightforward W-2 situations.
Get Matched With a CPA →Interested in reaching this audience? Advertise on CountryTaxCalc →
Why people move to North Carolina:
Why people leave or avoid North Carolina:
Tax considerations if moving here:
Source: North Carolina Department of Revenue - Tax Rate Schedules
| State | Tax Rate | Tax on $100K Income | Difference from North Carolina |
|---|---|---|---|
| North Carolina | 3.99% flat | $3,481 | Baseline |
| South Carolina | 1.99-5.21% | $4,244 | +$763 (more tax) |
| Virginia | 2-5.75% | $4,936 | +$1,455 (more tax) |
| Georgia | 4.99% flat | $4,242 | +$761 (more tax) |
Key insight: North Carolina's income tax is lower than that of its income-taxing neighbors Virginia, Georgia and South Carolina. Save $1,455/year vs Virginia, $761/year vs Georgia, $763/year vs South Carolina at $100K income. Neighboring Tennessee, which does not tax wages, beats NC. At $150K: save $2,335/year vs Virginia, $1,261/year vs Georgia, $1,373/year vs South Carolina.
But consider Tennessee (0% on wages) if pure tax savings is your goal:
Property tax comparison:
Combined income + property tax at $100K + $400K home:
Bottom line: North Carolina offers the best balance in the Southeast — 3.99% income tax + moderate 0.66% property tax + large job markets (Research Triangle, Charlotte). No-income-tax states such as Tennessee and Florida beat NC on income tax alone, so compare actual job offers.
North Carolina has a flat 3.99% state income tax on all income for 2026. This rate applies to everyone regardless of income level. NC switched from a progressive system (7.75% top rate in 2013) to flat tax in 2014 and has steadily reduced the rate: 5.8% (2014) → 5.75% (2015) → 5.499% (2017) → 5.25% (2019) → 4.99% (2022) → 4.25% (2025) → 3.99% (2026). Further cuts toward 3.49% are possible under current law.
NC's 2013-2026 tax reform lowered income tax rates substantially. At $100K income, the current 3.99% flat tax is $3,481; at $250K it is $9,466. The reform also eliminated estate tax and many deductions/complexities.
Partially. NC fully exempts Social Security income (no state tax at all). However, pensions, 401(k) withdrawals, and IRA distributions are generally taxable at the 3.99% flat rate (limited exceptions exist, such as certain government retirement benefits). This makes NC less retiree-friendly than Florida (0% on everything), Illinois (0% on retirement income), or Pennsylvania (0% on retirement income), but better than states like California (13.3% top) or New York (10.9% top).
Yes, if: you work in tech (Research Triangle), finance (Charlotte), or pharma, want lower taxes (save about $1,380/year at $100K vs NY state alone, $4,000+/year vs NYC with local tax), and can find comparable jobs. Stay if: your industry requires NY/NJ (media, fashion, certain finance roles), you rely on NY subway (NC is car-dependent), or value walkable urban density (NYC vs Charlotte/Raleigh).
At $100K income: save $761/year vs Georgia (3.48% vs 4.24% effective), $1,455/year vs Virginia. At $150K: save $1,261/year vs GA, $2,335/year vs VA. At $250K: save $2,261/year vs GA, $4,095/year vs VA. Plus NC property tax (0.66%) is lower than both GA (0.79%) and VA (0.82%). Combined income+property savings: roughly $1,281-2,095/year at $100K with a $400K home, growing at higher incomes.
Effective rates, what the headline hides, 111+ countries. Every two weeks, free.
Bi-weekly. No spam. Unsubscribe in one click.
How we calculate: North Carolina's flat 3.99% tax makes calculations simple: take your NC taxable income and multiply by 0.0399. Our calculator uses this flat rate on all income. NC allows a standard deduction ($12,750 for single filers in 2026), so we subtract that from federal AGI before applying 3.99%. Federal tax uses standard 2026 IRS brackets.
Data sources:
Verification: North Carolina's 3.99% flat tax rate for 2026 verified against NC Department of Revenue 2026 withholding tables. Tax reform history (2013 progressive to 2014 flat transition, subsequent rate reductions) verified against NC General Assembly session laws. Social Security exemption verified against NC Gen. Stat. § 105-153.5.
Limitations: Assumes single filer, W-2 wage income only. Does not include: federal deductions/credits, retirement income (Social Security is exempt, but pensions/401k/IRA are taxable at 3.99%), NC tax credits (child tax credit, low-income credits), property tax variations by county (ranges 0.5-1.1%). NC uses its own standard deduction amount ($12,750 for single filers in 2026).
For complex situations: Consult a licensed NC CPA or tax professional, especially for: retirement income tax treatment (Social Security exempt but other retirement income taxable), multi-state income allocation, business income and pass-through entities, property tax homestead exemptions (varies by county, elderly/disabled get additional exemptions).
Last Updated: October 2026
Verified By: Daniel · CountryTaxCalc
Contact: For corrections or questions, visit our contact page.
Last Updated: October 2026