Florida vs North Carolina: Taxes & Take-Home Pay 2026

The Charlotte–Tampa decision

Florida has no income tax and North Carolina has one of the lowest flat rates in the Southeast, 3.99% for 2026. That puts the gap at roughly 3% to 4% of salary for most workers, smaller than many people expect when comparing Charlotte or Raleigh with Tampa, Orlando or Miami.

This pair is popular in both directions. Workers move to North Carolina's Research Triangle and Charlotte banking jobs; retirees and remote workers move to Florida. Some people go "halfback": they retire to Florida, then move halfway back north to the North Carolina mountains.

How North Carolina's tax works

North Carolina's rate fell from 4.25% to 3.99% on January 1, 2026. It uses its own standard deduction rather than the federal one: $12,750 single, $25,500 joint and $19,125 head of household. Employers withhold at 4.09%, the 3.99% rate plus 0.1 point, which builds in a small refund for most workers.

If you itemize, North Carolina caps qualified mortgage interest and real estate taxes at a combined $20,000 and also allows charitable gifts and medical expenses. Compare that with the standard deduction before choosing.

Retirement income: Social Security is safe, pensions are not

North Carolina does not tax Social Security, but it taxes most pensions, 401(k) and IRA withdrawals at 3.99%. A single retiree with $50,000 of pension income would owe about $1,486 after the $12,750 standard deduction. Florida taxes none of it.

The exception is the Bailey exclusion. Benefits from North Carolina state and local government retirement systems and from the federal FERS and Civil Service systems are exempt if the retiree had five or more years of creditable service as of August 12, 1989. Qualifying retirees claim the deduction on Form D-400 Schedule S and attach the Form 1099-R or W-2 from the payer.

A retiree moving from North Carolina to Florida stops owing North Carolina tax on pension and IRA income from the day they become a Florida resident; federal law (4 U.S.C. §114) bars states from taxing the retirement income of nonresidents.

Sales tax and groceries

Average combined sales tax is 6.98% in Florida and 7.10% in North Carolina, close enough that it rarely decides the move. Local details differ: Mecklenburg County (Charlotte) added a 1% local sales tax effective July 1, 2026, bringing its combined rate to 8.25%, and Florida county surtaxes go up to 2.00%.

Groceries are where the states part ways. Florida exempts food products for home consumption. North Carolina exempts qualifying food from the state rate but taxes it at a flat 2% local rate statewide, so a family spending $9,000 a year on groceries pays about $180 in North Carolina and nothing in Florida.

Property tax and housing costs

Florida's homestead exemption can cut a primary home's taxable value by up to $50,000, and the Save Our Homes limit holds annual increases in assessed value to the lesser of 3% or the change in the Consumer Price Index once the exemption is in place. That limit protects long-time owners but means a buyer often inherits a much higher assessment than the seller paid on. North Carolina property taxes are set by counties and cities and are generally moderate.

Homeowners in coastal Florida should also budget for insurance costs that can outweigh the tax difference with North Carolina. That is not a tax, but it belongs in the same calculation.

The year you move

North Carolina part-year residents file Form D-400 and prorate their tax using the ratio of North Carolina income to total income. Moving to Florida on September 1, for instance, someone earning evenly would report about two-thirds of the year's wages to North Carolina. Florida has no return to file.

Remote workers who move to Florida but keep a North Carolina employer should update their NC-4 or ask payroll to stop North Carolina withholding once they are working from Florida, and keep records showing the move date and where the work was done.