North Carolina Income Tax Rate 2026

North Carolina uses a flat income tax rate of 3.99% for 2026, part of the state's enacted step-down schedule. The standard deduction is $12,750 for single filers and $25,500 for joint filers. The state sales tax rate is 4.75%, with groceries taxed at a reduced 2.00% state rate. Use the calculators below to estimate your North Carolina tax liability for 2026.

North Carolina Income Tax 2026

North Carolina levies a flat 3.99% income tax on all taxable income for TY2026. This rate is part of the state's enacted step-down schedule from 4.5%. The standard deduction is $12,750 for single filers, $25,500 for married filing jointly, and $19,125 for head of household. North Carolina does not use personal exemptions.

North Carolina Grocery Tax

North Carolina taxes food at a reduced 2.00% state rate, compared to the full 4.75% rate for other goods. Local sales taxes also apply to food purchases in addition to the state rate.

North Carolina Sales Tax

North Carolina's state sales tax rate is 4.75%. Counties add local rates, typically 2-2.75%. Most grocery food is taxed at the reduced 2.00% state rate rather than the full rate.

OBBBA Conformity - Does North Carolina Follow Federal Deductions?

No North Carolina benefit. NCDOR's Q&A on the impact of federal law:

Q8. Can I deduct the new federal deductions for tips, overtime pay, car loan interest, and the new senior deduction (collectively “New OBBBA Deductions”) on my 2025 North Carolina individual income tax return?

A8. No. The New OBBBA Deductions are taken after a taxpayer calculates AGI and therefore do not affect North Carolina taxable income. The General Assembly must enact legislation to allow taxpayers to reduce AGI for similar adjustments.

North Carolina starts from federal AGI. Session Law 2026-31 updated NC's IRC reference date to July 5, 2025, which does not change this. House Bill 11 ("No Tax on Tips, Overtime, Bonus Pay") has been in the House Finance Committee since March 11, 2025. Source: NCDOR Q&A (Q8/A8).

North Carolina Retirement Tax

North Carolina does not tax Social Security benefits. Certain NC government pensions are exempt under the Bailey Settlement for qualifying retirees with 5+ years of creditable service as of August 12, 1989. Other pension and retirement income is taxable at the flat 3.99% rate.

North Carolina Tax Calculators