North Carolina Paycheck Calculator

What is North Carolina's income tax rate?

NC has a flat 4.75% income tax rate in 2024, down from a progressive structure that topped at 5.499% in 2021. The rate is legislated to fall further: 4.5% in 2025, 4.25% in 2026, 3.99% in 2027, and potentially lower if revenue benchmarks are met. NC allows a standard deduction of $10,750 (single) and $21,500 (MFJ) before applying the rate.

How does NC compare to neighboring Southeast states?

Southeast comparison: Georgia (5.49%), South Carolina (6.4% top), Tennessee (0%), Virginia (5.75% top), NC (4.75%). NC is moving toward Georgia's trajectory. When NC reaches 3.99% by 2027, it will be one of the most competitive income-tax states in the Southeast, likely accelerating business and population growth.

Does NC tax retirement income?

NC taxes most retirement income but with exceptions: Social Security is fully exempt. Military retirement pay is fully exempt (since 2021). Government pension income from NC, federal, or other state systems is taxable. 401k and IRA distributions are taxable. NC is increasingly popular for military retirees due to the military pension exemption and lower overall rates.

What is NC's local tax situation?

North Carolina is unique in that cities and counties cannot levy a local income tax on residents. This is a significant advantage over states like Ohio and Pennsylvania where local taxes add 1–3% on top of state tax. NC residents pay only the state flat rate + federal — no Charlotte, Raleigh, or Durham local income tax.