North Carolina state taxes at a glance
| Individual income tax | Flat-rate income tax |
|---|---|
| Rate structure | A flat individual income tax rate. Published rate tables show 3.99% for 2026, down from 4.25% in 2025 under a legislated phase-down; verify the current rate with the Department of Revenue. |
| Tax agency | North Carolina Department of Revenue (NCDOR) |
| Main individual return | Form D-400 |
| Local income taxes | No general local income taxes. |
| Sales tax | A state rate plus county rates; the combined rate varies slightly by county. |
| Property tax | Locally administered by counties; homestead exclusions and deferrals exist for qualifying older or disabled homeowners. |
| Retirement & Social Security | North Carolina does not tax Social Security benefits; other retirement income is generally taxed as ordinary income. |
Verify current-year figures: state rates, brackets, credits and filing rules change. Treat this page as a starting orientation and confirm details on the North Carolina Department of Revenue (NCDOR) website.
How North Carolina income tax works
North Carolina taxes income at a single flat rate that state law has been lowering in steps. Published rate tables show the rate falling to 3.99% for 2026 from 4.25% for 2025, with possible further reductions in later years if revenue conditions are met. Because the scheduled reductions depend on legislation and revenue triggers, check NCDOR for the rate applicable to your tax year.
North Carolina starts from federal adjusted gross income, then makes additions and deductions. It has its own standard deduction (which depends on filing status) or lets you itemize certain deductions on a state schedule; as the state does not follow every federal change, a federal deduction does not automatically apply on the state return. A child deduction is available for qualifying families, with amounts that decrease at higher incomes; check the current table in the D-400 instructions.
Social Security benefits are not taxed. Other retirement income, including most pension and IRA distributions, is generally taxed as ordinary income, although there is a limited exclusion for certain government pensions in specific situations — read the NCDOR guidance. If you moved into or out of the state, you file as a part-year resident and allocate income by residency period.
Filing your North Carolina return and free options
Residents file Form D-400 by April 15 (with an automatic extension to file available when you extend your federal return, though payment is still due on time — see extensions explained). NCDOR’s online services handle refund status and payments. Free-filing availability varies by year; the state has worked with community partners and the free federal programs described in our free filing hub. Check NCDOR for the current-year options.
If you owe and cannot pay in full, NCDOR offers installment agreements; contacting them early is usually better than waiting for penalties to pile up.
For the federal side, see our guides to free federal filing options and the complete guide to filing taxes.
Things North Carolina residents often ask about
- Rate changes: the flat rate has been falling; verify your year’s rate.
- Use tax: out-of-state purchases without sales tax may owe use tax; North Carolina asks about it on the return.
- Part-year residents: allocate income by residency period on the D-400 schedules.
- Refund status: use NCDOR’s “Where’s My Refund?”; see state refund status.
Official North Carolina links
- NCDOR: individual income tax
- NCDOR: homepage
- NCDOR: file and pay online
- Federation of Tax Administrators: State tax agencies
Frequently asked questions
What is the North Carolina income tax rate?
A flat rate; published tables show 3.99% for 2026. Verify with NCDOR since rates have been changing.
Does North Carolina tax Social Security?
No. North Carolina does not tax Social Security benefits.
Is there a North Carolina use tax?
Yes. If you buy items without paying North Carolina sales tax, you may owe use tax; the D-400 asks about it.
General information only — not tax, legal or financial advice. Tax figures change every year; verify the current numbers at IRS.gov or with a qualified professional. Read the full disclaimer.