New York vs North Carolina: Taxes & Take-Home Pay 2026

Why New Yorkers look at North Carolina

Charlotte, Raleigh-Durham and the Asheville area are among the most common destinations for people leaving New York, especially remote workers and retirees. North Carolina’s flat income tax fell to 3.99% in 2026, and the state has no employee payroll programs. New York’s rates start at 3.9% and reach 10.9%, with New York City residents paying their city tax on top.

Income tax at a glance

North Carolina is simple: subtract the standard deduction ($12,750 single, $25,500 married filing jointly, $19,125 head of household) and multiply by 3.99%. Employers withhold at 4.09% in 2026, slightly above the tax rate, to reduce under-withholding. New York uses a smaller standard deduction ($8,000 single, $16,050 joint) with nine brackets, and offers an Empire State Child Credit for young children; North Carolina has a child deduction instead.

For a married couple with two children earning $120,000, the engine puts New York State income tax at about $5,173 and North Carolina at about $3,771, a gap of $1,402 a year before any New York child credit. If the family lived in New York City, the city’s resident tax would add roughly $3,804 more.

Retirees: pensions and Social Security

Neither state taxes Social Security. The difference is in pensions and IRA withdrawals. New York lets each resident aged 59½ or older exclude up to $20,000 of private pension and annuity income and fully exempts New York State, local and federal government pensions. North Carolina taxes most retirement distributions at the flat rate, except for retirees covered by the Bailey decision: those with five or more years of creditable service in a North Carolina state or local plan, or a federal or military plan, as of August 12, 1989.

Worked example: a retired married couple with Social Security and a $40,000 private pension paid to one spouse, who is over 59½. In New York the pension exclusion and standard deduction leave about $3,950 taxable, for state tax of about $154. In North Carolina the same pension minus the $25,500 standard deduction is taxed at 3.99%, about $579. For this couple New York is actually cheaper on income tax; any savings from this move would have to come from costs other than the state income tax return.

Keeping your New York job after you move

Moving to North Carolina does not automatically end New York tax on your salary. If your employer’s office is in New York and it has not set up a bona fide employer office at your North Carolina home, New York counts your telecommuting days as New York workdays, and you will file a nonresident return (Form IT-203) every year. Ask your employer, before you move, how they will treat your remote days and update your state withholding forms for both states.

Sales tax, property tax and payroll

• Sales tax: North Carolina’s state rate is 4.75% with an average combined rate of 7.10%; Mecklenburg County (Charlotte) rose to 8.25% on July 1, 2026. New York’s average combined rate is 8.54%, and 8.875% in New York City.
• Payroll programs: New York withholds Paid Family Leave (0.432%) and disability insurance (up to $0.60 a week). North Carolina has neither, so nothing beyond federal FICA and state income tax comes out of a North Carolina paycheck.
• Property tax: both states levy property tax locally, and bills depend on county and city rates and assessed values. Compare actual tax bills for the homes you are considering rather than statewide averages.
• Local income tax: North Carolina has none. In New York, only New York City and Yonkers residents pay one.

Filing in the year you move

You will file part-year returns in both states. New York’s Form IT-203 taxes all income received while you were a New York resident, plus New York-source income afterwards, and some items must be accrued to the New York period when you leave. North Carolina taxes you as a resident from your move date. Keep records of your move date, such as a lease or closing statement and the date you changed your driver’s license, because the residency split turns on when your permanent home changed.