North Carolina (NC) Tax Rates — 2026

Income Tax 4.5%

Sales Tax 7%

Property Tax 0.73%

Income Tax

Type: Flat rate — 4.5% on all taxable income

Standard Deduction: Single: $12,750 | Married Filing Jointly: $25,500

Sales Tax

State Rate4.75%

Avg Local Rate2.25%

Combined Rate7%

Groceries: Exempt

+0.43% vs national avg

Property Tax

Effective Rate0.73%

Median Annual Tax$1,622

-0.34% vs national avg (1.07%)

Retirement Income Tax

Social SecurityNO

PensionsFULLY TAXED

401(k) / IRAYES

Estate & Inheritance Tax

Has Estate Tax: NO

Corporate Tax

Corporate Income Tax Rate: 2.5%

Additional Notes

North Carolina has a flat income tax rate scheduled to continue declining (4.25% by 2027). Bailey Settlement: government retirees who vested before 8/12/1989 are exempt. Otherwise, pensions are fully taxed.

Compare with another state:

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Sources: North Carolina Department of Revenue; Tax Foundation, Facts & Figures 2025; IRS Publication 17.