North Carolina Income Tax Calculator 2026

North Carolina’s flat 3.99% income tax

North Carolina taxes all income at one rate: 3.99% in 2026, down from 4.25% in 2025. You start with federal AGI, make North Carolina additions and deductions on Schedule S, subtract either the North Carolina standard deduction or North Carolina itemized deductions, subtract the child deduction, and multiply what is left by 3.99%.

The North Carolina standard deduction is $12,750 for single filers, $25,500 for married couples filing jointly and $19,125 for heads of household — lower than the federal amounts, so do not copy your federal deduction across.

The North Carolina child deduction

For each child who qualifies you for the federal child tax credit, North Carolina allows a deduction that shrinks as income rises. The table below is the Department’s schedule for tax year 2025, the latest it has published:

• Above $140,000 (joint), $105,000 (head of household) or $70,000 (single) the deduction is $0.

Worked example: married couple, $100,000, two children

A married couple filing jointly with $100,000 of AGI and two qualifying children subtracts the $25,500 standard deduction and a child deduction of $1,500 per child ($3,000 total).

• North Carolina taxable income: $100,000 − $25,500 − $3,000 = $71,500.
• Tax: $71,500 × 3.99% = $2,853.
• Without the child deduction the bill would be $120 higher. The calculator above does not apply the child deduction, so families should subtract this amount from its result.

Retirement income and the Bailey exclusion

North Carolina does not tax Social Security benefits. Most other retirement income is taxable, with one important exception: under the Bailey v. State of North Carolina decision, retirement benefits from North Carolina state and local government plans and from federal (including military) plans are exempt if the retiree had five or more years of creditable service in the plan as of August 12, 1989.

Qualifying retirees claim the exclusion on Form D-400 Schedule S and must attach the Form 1099-R or W-2 that supports it. Even if all of your retirement income is excluded, you still have to file a North Carolina return if your gross income meets the filing requirement.

Filing your North Carolina return

Residents file Form D-400 by April 15. Part-year residents and nonresidents also file D-400 and use a ratio of North Carolina income to total income to prorate their tax. If you itemize federally, compare North Carolina itemized deductions — which allow qualified mortgage interest and real estate taxes up to a combined $20,000, charitable contributions and medical and dental expenses — with the North Carolina standard deduction before choosing.