North Carolina income tax tables are relatively simple because the state uses a flat individual income tax rate rather than a traditional progressive tax bracket system.
North Carolina taxpayers generally calculate state taxable income after applying the appropriate deductions and adjustments, then apply the state’s flat income tax rate.
This makes North Carolina income taxes easier to estimate than federal income taxes, which use multiple tax brackets.
Table of Contents
North Carolina Income Tax Rate
North Carolina has a flat individual income tax rate of 3.99%. Unlike federal tax tables, North Carolina does not apply different marginal tax rates to different levels of taxable income.
North Carolina Taxable Income
Tax Rate
All taxable income
3.99%
The 3.99% rate is applied to North Carolina taxable income after the taxpayer’s applicable deductions and adjustments.
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Example: A taxpayer with $50,000 of North Carolina taxable income would have a preliminary state income tax of $1,995 before applicable credits.
North Carolina Income Tax Tables
Because North Carolina uses a flat tax rate, the income tax table is straightforward.
Taxable Income
Tax at 3.99%
$10,000
$399
$20,000
$798
$30,000
$1,197
$40,000
$1,596
$50,000
$1,995
$60,000
$2,394
$75,000
$2,992.50
$100,000
$3,990
$150,000
$5,985
$200,000
$7,980
These figures are basic calculations before deductions, credits, and other adjustments.
The income tax you actually owe may differ from the amounts shown in this simple table.
North Carolina Standard Deduction
North Carolina allows taxpayers to claim either the state standard deduction or qualifying itemized deductions.
Filing Status
Standard Deduction
Single
$12,750
Married Filing Separately
$12,750
Head of Household
$19,125
Married Filing Jointly
$25,500
Qualifying Widow(er) or Surviving Spouse
$25,500
These deductions reduce the amount of income subject to the North Carolina income tax rate.
North Carolina does not provide an additional state standard deduction simply because a taxpayer is age 65 or older or blind.
North Carolina Taxable Income
North Carolina taxable income is not necessarily the same as federal taxable income.
The state generally begins with federal adjusted gross income and then makes North Carolina-specific additions, deductions, and other adjustments.
A simplified calculation is:
Start with federal adjusted gross income.
Add or subtract applicable North Carolina adjustments.
Determine the North Carolina adjusted income.
Subtract the standard deduction or allowable itemized deductions.
Apply other qualifying deductions.
Calculate North Carolina taxable income.
Apply the 3.99% state tax rate.
Subtract applicable tax credits.
The result is the taxpayer’s North Carolina income tax liability before comparing it with withholding and estimated payments.
North Carolina Tax Tables for Single Taxpayers
Single taxpayers generally use the $12,750 standard deduction.
Single Taxpayer
Amount
Standard deduction
$12,750
Income tax rate
3.99%
Example: A single taxpayer with $60,000 of income could subtract the $12,750 standard deduction before applying the North Carolina tax rate, assuming no other adjustments.
The simplified taxable income would be $47,250.
At 3.99%, the preliminary tax would be approximately $1,884.28 before credits and other adjustments.
North Carolina Tax Tables for Married Couples
Married couples filing jointly generally receive a $25,500 standard deduction.
Married Filing Jointly
Amount
Standard deduction
$25,500
Income tax rate
3.99%
Example: A married couple with $100,000 of income could have $74,500 of taxable income after the standard deduction, assuming no other adjustments.
Applying the 3.99% rate to $74,500 would produce a preliminary tax of approximately $2,972.55.
North Carolina Tax Tables for Head of Household
Taxpayers who qualify for head-of-household filing status generally receive a $19,125 standard deduction.
Head of Household
Amount
Standard deduction
$19,125
Income tax rate
3.99%
The larger standard deduction can reduce the amount of income subject to North Carolina income tax.
North Carolina Itemized Deductions
North Carolina allows eligible taxpayers to choose between the standard deduction and itemized deductions.
Taxpayers who have qualifying itemized deductions greater than the standard deduction may benefit from itemizing.
North Carolina itemized deductions can include certain:
North Carolina’s itemized deduction rules differ from federal rules, so taxpayers should calculate their state deductions separately.
North Carolina Income Tax for Seniors
North Carolina does not impose an additional standard deduction simply because a taxpayer is age 65 or older.
However, retirement income can receive special treatment depending on its source and circumstances.
North Carolina generally does not tax Social Security benefits.
Other retirement income, such as pensions and distributions from retirement accounts, can have different state tax consequences.
Seniors should therefore examine each source of retirement income separately rather than applying the 3.99% rate to all retirement income.
North Carolina Social Security Taxes
Social Security benefits are generally not subject to North Carolina individual income tax.
This can be an important advantage for retirees who rely heavily on Social Security.
Federal tax rules are different. Some taxpayers may have taxable Social Security benefits for federal purposes even though those benefits are not subject to North Carolina income tax.
This is one reason federal tax tables and North Carolina income tax tables can produce very different results.
A deduction reduces taxable income, while a credit directly reduces tax owed.
North Carolina Child-Related Tax Benefits
North Carolina provides certain deductions and tax benefits for taxpayers with qualifying children.
The state has a child deduction that can reduce North Carolina taxable income for qualifying taxpayers.
Eligibility and deduction amounts can depend on income and other requirements.
Families should review both federal and North Carolina rules because the qualifications for a federal child tax benefit and a North Carolina deduction are not necessarily identical.
North Carolina Tax Withholding
Employers generally withhold North Carolina income tax from employee wages.
The amount withheld is an estimated payment toward the taxpayer’s final state income tax liability.
When the taxpayer files a North Carolina return, the state compares the tax liability with the amount already withheld.
If too much was withheld, the taxpayer may receive a refund.
If not enough was withheld, the taxpayer may owe additional tax.
North Carolina Income Tax for Self-Employed Taxpayers
Self-employed taxpayers may have more complicated North Carolina tax calculations.
Business owners must determine how North Carolina law treats business income and whether additional state adjustments apply.
Business income can also affect federal adjusted gross income, which is generally an important starting point for the North Carolina calculation.
Self-employed taxpayers should keep accurate records of business income, expenses, estimated tax payments, and applicable deductions.
North Carolina Income Tax and Federal Tax Brackets
North Carolina income tax tables differ significantly from federal tax tables.
Federal income taxes use multiple progressive tax brackets. North Carolina generally uses one flat individual income tax rate.
This means a taxpayer can have several different federal marginal tax rates while having only one North Carolina income tax rate applied to taxable state income.
The two tax returns also use different deductions, exemptions, adjustments, and credits.
North Carolina Income Tax Example
Consider a single taxpayer with $75,000 of income.
Assume the taxpayer uses the $12,750 standard deduction and has no other adjustments or credits.
Calculation
Amount
Income
$75,000
Standard deduction
$12,750
North Carolina taxable income
$62,250
Tax rate
3.99%
Preliminary North Carolina tax
$2,483.78
This is a simplified example. Actual tax liability may differ after applying North Carolina adjustments, deductions, and credits.
Unique Factors of North Carolina Taxes
North Carolina has one of the simpler individual income tax structures in the country because it uses a flat tax rate.
A $25,500 standard deduction for married couples filing jointly
A $19,125 standard deduction for heads of household
No additional standard deduction solely because a taxpayer is age 65 or older
Generally no North Carolina income tax on Social Security benefits
Special rules for retirement income
State-specific deductions and credits
Separate treatment of North Carolina taxable income from federal taxable income
These provisions make North Carolina income taxes substantially different from federal tax brackets.
Frequently Asked Questions
What is the North Carolina income tax rate?
North Carolina has a flat individual income tax rate of 3.99%.
Does North Carolina have tax brackets?
North Carolina does not use a traditional progressive income tax bracket system. The state generally taxes taxable individual income at its flat rate.
What is the North Carolina standard deduction?
The standard deduction is $12,750 for single taxpayers and married taxpayers filing separately, $19,125 for heads of household, and $25,500 for married couples filing jointly.
Does North Carolina tax Social Security?
Social Security benefits are generally not subject to North Carolina individual income tax.
Does North Carolina tax pensions?
The tax treatment of pension income depends on the type of pension and the taxpayer’s circumstances. Some retirement income may receive special treatment under North Carolina law.
Does North Carolina have a senior tax deduction?
North Carolina does not provide an additional standard deduction simply because a taxpayer is age 65 or older or blind.
Are North Carolina tax tables the same as federal tax tables?
No. Federal tax tables use progressive tax brackets, while North Carolina generally uses a flat individual income tax rate.
Can I use the North Carolina standard deduction or itemize?
Eligible taxpayers can generally choose the North Carolina standard deduction or qualifying itemized deductions. The larger deduction may lower your state tax liability.
Before filing, taxpayers should carefully review their income, deductions, retirement income, withholding, and available credits.
Bottom Line
North Carolina income tax tables are relatively simple because the state uses a flat 3.99% individual income tax rate instead of traditional progressive tax brackets.
The standard deduction, itemized deductions, child-related deductions, retirement income rules, and available tax credits can significantly affect the final amount of tax owed.
For retirees, North Carolina can be especially important to consider because Social Security benefits generally are not subject to state income tax.
Understanding the differences between North Carolina income tax tables and federal tax brackets can help taxpayers estimate their total tax liability more accurately.
North Carolina income tax tables are relatively simple because the state uses a flat individual income tax rate rather than a traditional progressive tax bracket system.
