Does North Carolina have a state income tax?

Yes. North Carolina has a state income tax with a top rate of 4.0%.

How much is North Carolina state tax on a $100,000 salary?

On a $100,000 salary in North Carolina, state income tax is approximately $3,348. Your estimated total take-home pay is $75,832/year.

What other taxes does North Carolina have?

North Carolina has a 4.75% state sales tax (counties add up to 2.75%, making most totals 6.75–7.5%). No estate or inheritance tax.

How does North Carolina compare to other states for taxes?

North Carolina's top rate of 4.0% compares favorably — below the national median for state income taxes.

Is North Carolina a good state for retirees?

Yes. North Carolina has no estate tax, a relatively low and declining income tax, and a lower cost of living than coastal states. It is popular with retirees.

State Tax Guide

North Carolina State Income Tax Guide (2026)

Q: What is North Carolina's income tax rate?

North Carolina has a flat 3.99% income tax rate in 2026 — the endpoint of the 2013–2026 phase-down from 5.499% top rate. Among the lowest flat rates in the country.

North Carolina has a flat income tax rate of 3.99% in 2026 (the endpoint of the 2013–2026 phase-down from 5.499%) — among the lowest flat rates in the country.

Top State Rate

4.0%

$100k Take-Home

$75,832

/year (single)

State Tax on $100k

$3,348

single filer

North Carolina Income Tax Brackets (2026)

Marginal Rate	Taxable Income (Single Filer)
3.99%	$0→All income (2026)

Each rate applies only to income within that bracket. Your effective rate is the average across all brackets — meaningfully lower than your top marginal rate.

Standard deduction: $12,750 single / $25,500 married filing jointly

Brackets reflect the most recently published schedules. Some states inflation-index thresholds annually — specific 2026 amounts may shift slightly. Verify with your state's Department of Revenue before filing.

Want exact numbers for your situation?

The dedicated North Carolina paycheck calculator lets you adjust salary, filing status (single, MFJ, HOH, MFS), 401(k) and HSA contributions, dependents for your exact 2026 take-home figure.

Single / MFJ / HOH / MFS401(k) + HSADependents2026

Open North Carolina calculator →

The 30-second version

1.North Carolina has a flat 3.99% income tax for 2026 (phased down from 4.5% in 2024 and 4.25% in 2025). Among the lowest flat rates in the country.
2.RTP / Raleigh / Durham tech corridor and Charlotte banking (BofA HQ, Truist HQ, Wells Fargo East regional) drive a substantial high-comp professional audience. NC has been a top-5 in-migration destination for the past decade.
3.NC standard deduction: $12,750 single / $25,500 — close to federal but lags by ~$2,250 / $4,500. Personal exemption eliminated.
4.No state estate or inheritance tax. Property tax averages ~0.73% (low). Bailey decision exempts state and local government pensions earned before 1989 fully.
5.For retirees relocating from NJ, NY, or IL: NC offers a meaningful cost-of-living + tax advantage. Asheville, the Triangle, and the Coast are the typical relocation targets.

Why you can trust these numbers

Numbers reflect 2026 IRS federal brackets, caps, and the current NC Department of Revenue 3.99% flat rate. The calculator at the top reflects this directly. NC's standard deduction differs slightly from federal, so the calculator may under-state your NC bill by $50–$150 — minor.

Sources: federal brackets + standard deduction from IRS Rev. Proc. 2025-32; state brackets verified against the Tax Foundation 2026 State Income Tax Rates compilation and the official D-400 Individual Income Tax Forms (NC Department of Revenue).

The flat rate phase-down — among the most aggressive in the country

NC's progressive system was eliminated in 2014, replaced with a flat tax that started at 5.8% and has dropped steadily since. The 2022 Senate Bill 105 accelerated the phase-down: 4.99% (2022), 4.75% (2023), 4.5% (2024), 4.25% (2025), 3.99% (2026). The 2026 rate is the new floor under current law unless future legislation changes it. NC is one of the more aggressive flat-rate-cutters in the US, and the political consensus around continuing the trajectory has been broadly stable.

Standard deduction is $12,750 single / $25,500 for 2026 — slightly below federal $15K/$30K. Personal exemption is zero (eliminated in NC's 2014 reform). Most filers experience NC as essentially federally conformed at a low rate.

What you'll actually pay — two real-life scenarios

Two scenarios to anchor the math. The calculator at the top handles your specific number.

Illustrative — single filer unless noted, federal standard deduction, full-year NC residency, W-2 income unless specified. Two-earner MFJ households pay more FICA than the calculator shows. Ballparks, not invoices.

Scenario 1: RTP software engineer in Raleigh, $130,000

Federal income tax	~$20,200
North Carolina income tax (3.99% × $115K taxable)	~$4,600
FICA (Social Security + Medicare)	~$9,950
Total income taxes	~$35,750
Annual take-home	~$95,250
Effective NC tax rate	~3.5%

Classic RTP / Raleigh / Durham / Cary tech worker — IBM, Cisco, SAS, Red Hat, Epic Games, or one of the dozens of growth-stage startups at HQ Raleigh / American Underground. Same comp in California: ~$8,000 CA state tax. NC's $4,600 saves ~$3,400/year vs CA. Combined with significantly cheaper housing (median Triangle home ~$420K vs $1.2M Bay Area), the after-tax-after-housing advantage is substantial.

Scenario 2: Charlotte BigLaw senior associate, $250,000

Federal income tax	~$49,250
North Carolina income tax (3.99% × $235K taxable)	~$9,400
FICA + Additional Medicare	~$15,500
Total income taxes	~$74,150
Annual take-home (pre-housing)	~$175,850
Effective NC tax rate	~3.8%

Charlotte BigLaw / banking professional (Robinson Bradshaw, Moore & Van Allen, BofA general counsel office). Same comp in NYC: ~$13,500 NY + ~$8,500 NYC = $22,000 — about $12,600 more than NC's $9,400. Charlotte housing ~40% cheaper than equivalent NYC. The total professional take-home is meaningfully better than coastal alternatives at this income level.

Property tax + the Bailey pension exemption

NC property tax effective rates by county (approximate): Wake (Raleigh) ~0.81%, Mecklenburg (Charlotte) ~0.83%, Durham ~1.01%, Buncombe (Asheville) ~0.66%, New Hanover (Wilmington) ~0.59%, Union ~0.71%. Statewide average is ~0.73%. Below national average and well below NJ (2.5%) or TX (1.6%).

Bailey decision (1998 NC Supreme Court): state and local government employee pensions earned before August 1989 are fully exempt from NC tax. Federal civil service pensions earned in qualifying periods also exempt under the same ruling. For long-tenured government retirees, this can mean significant pre-1989 service is permanently NC-tax-free.

Things financially comfortable North Carolinians actually do

Max your ($24,500 in 2026) — pre-tax for federal AND NC.
Max your if eligible — pre-tax for federal AND NC.
Backdoor Roth IRA — fully legal, well-established.
Mega backdoor Roth if your employer's plan allows.
NC529 (CFNC's College Foundation 529) — NC does NOT offer a state-tax deduction for 529 contributions (unlike most states). Shop any 529 plan for the lowest fees.
Bailey pension exemption — if you have qualifying pre-1989 government service, ensure the exclusion is claimed on Form D-400 Schedule S. Easy to miss in self-prepared returns.
Property tax homestead exclusion for seniors (65+) and disabled — income-tested, applies to a portion of assessed value. File with your county tax office.
Conservation easement and present-use valuation — for qualifying agricultural and timberland properties, NC offers significantly reduced assessment. Worth exploring for rural landowners.

Real questions people actually ask

Q: Will NC's flat rate keep dropping after 2026?

Possibly. Current statute holds the rate at 3.99% from 2026 onward. The General Assembly has periodically considered further cuts, but no enacted schedule extends below 3.99%. Plan around 3.99% as the floor unless new legislation passes.

Q: Does NC tax my SS and pension income?

SS: fully exempt from NC tax (NC is one of the SS-friendly states). Government pensions earned before August 1989: fully exempt under Bailey. Other pensions and IRA distributions: taxed at NC's 3.99% rate. NC was previously more retirement-restrictive but has become friendlier with each rate cut.

Q: I'm relocating from NJ to Raleigh — what's my tax delta?

At $200K, roughly $7,000–$10,000/year in income tax savings (NJ effective ~6% vs NC 3.5%). Property tax delta: NJ ~2.5% vs NC ~0.7% — saves another $10,000–$15,000/year on equivalent home values. Total annual savings: $17,000–$25,000+. Combined with cheaper housing in absolute terms, the relocation math is genuinely favorable.

Q: How does NC compare to SC for retirees?

Both are flat-rate (NC 3.99%, SC 6.4% top of progressive structure). SC has a more generous retirement income deduction for ages 65+ (up to $15K). NC is simpler and has lower overall property tax. For retirees with primarily SS + government pension income, NC often wins (Bailey exemption + SS exemption). For retirees with substantial private pension or IRA income, SC's larger deduction may favor SC. Run both.

Our honest opinion (which is just an opinion)

North Carolina is one of the most quietly successful tax states in the country. The flat-rate phase-down has been steady, the cost of living is meaningfully cheaper than coastal alternatives, and the corporate-relocation pipeline (Apple in RTP, Toyota in Liberty, Google in Durham) keeps building economic depth. The retiree relocation story is also genuine.

The case for North Carolina:

+Flat 3.99% rate (2026) — among the lowest in the country
+No state estate or inheritance tax
+Property tax (~0.73%) below national average
+SS exempt; Bailey pre-1989 government pension exemption
+Strong economy: tech (RTP), banking (Charlotte), pharma, manufacturing
+Cost of living significantly lower than NJ, NY, MA
+Ocean + mountains within 4 hours of major metros

The case against:

−NO state-tax deduction for 529 contributions (unusual)
−Standard deduction lags federal slightly
−Some rural counties have weaker public services
−Hurricane risk on the coast (Wilmington, Outer Banks)

Honest take: if you're a tech worker, banking professional, or retiree, NC is one of the strongest financial fits in the Southeast. The phase-down rate combined with the cost-of-living advantage makes it competitive with no-tax states for many income levels. If you're a HNW retiree comparing NC vs FL: FL still wins on the no-income-tax angle and SS exemption, but NC is meaningfully cheaper on housing and cost of living.

What now

Run your numbers in the calculator above. The NC line is small and predictable. If you have qualifying pre-1989 government service, claim the Bailey exemption. If you have kids, shop any 529 for low fees (NC doesn't reward in-state plans with a deduction).

Sources & further reading

A few honest notes

Not personal tax, legal, or financial advice. Verify with a licensed CPA, EA, or tax attorney before making meaningful decisions.
Tax law changes. This guide reflects 2026 IRS schedules and current NC DOR rules.
Property tax estimates vary by county and municipality — check your county tax assessor for your specific parcel.
The numbers are illustrative — scenarios don't include every credit, deduction, or wrinkle that might apply to you.
No client relationship is created by reading this page.

Last updated April 2026 with 2026 IRS schedules and current NC DOR guidance.