North Carolina Tax Calculator & Rates 2026
North Carolina uses a flat income tax rate of 3.99% for 2026, part of the state's enacted step-down schedule (previously 4.5%). 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?
Per the NCDOR Important Notice (January 8, 2026), North Carolina starts from federal AGI and applies its own standard deduction. OBBBA deductions for tips and overtime are above-the-line deductions that reduce federal AGI, so they do flow through to NC.
- Tips Deduction: Structural conformity (flows through AGI). NCDOR Important Notice (January 8, 2026): 'OBBBA deductions taken after AGI do not affect NC taxable income.' North Carolina starts from federal AGI and applies its own standard deduction; the federal OBBBA deductions for tips are above-the-line deductions that reduce federal AGI, so they DO flow through to NC. However, the NCDOR notice clarifies that any OBBBA deductions taken AFTER AGI (i.e., below-the-line) do not affect NC taxable income.
- Overtime Deduction: Structural conformity (flows through AGI). NCDOR Important Notice (January 8, 2026): 'OBBBA deductions taken after AGI do not affect NC taxable income.' North Carolina starts from federal AGI and applies its own standard deduction; the federal OBBBA deductions for overtime are above-the-line deductions that reduce federal AGI, so they DO flow through to NC. However, the NCDOR notice clarifies that any OBBBA deductions taken AFTER AGI (i.e., below-the-line) do not affect NC taxable income.
- Senior Bonus Deduction: Structural conformity (flows through AGI). NCDOR Important Notice (January 8, 2026): 'OBBBA deductions taken after AGI do not affect NC taxable income.' North Carolina starts from federal AGI and applies its own standard deduction; the federal OBBBA senior bonus deduction is an above-the-line deduction that reduces federal AGI, so it DOES flow through to NC. However, the NCDOR notice clarifies that any OBBBA deductions taken AFTER AGI (i.e., below-the-line) do not affect NC taxable income.
The NCDOR clarifies that any OBBBA deductions taken after AGI (below-the-line) do not affect NC taxable income.
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.