The rate for 2026 and the years ahead.
The 2026 rate is 3.99%. Under the 2026 state budget law, Session Law 2026-41, the rate drops to 3.49% for 2027 through 2029, 3.24% for 2030 through 2032, and 2.99% from 2033, according to the General Assembly's fiscal note.
Standard deduction and child deduction.
North Carolina's standard deduction is set in state law and did not change for 2026.
- Single or married filing separately: $12,750.
- Head of household: $19,125.
- Married filing jointly or surviving spouse: $25,500.
For each child who qualifies for the federal child tax credit, North Carolina allows a separate deduction of up to $3,000. It steps down by $500 as income rises and ends above $140,000 for joint filers, $105,000 for heads of household, and $70,000 for single filers.
Itemizing: a $20,000 cap on home costs.
If you itemize on the state return, mortgage interest and real estate property taxes together cannot exceed $20,000. A 2026 law changed the property tax portion to follow the federal state and local tax rules, so the old $10,000 federal limit no longer squeezes it. Charitable gifts allowed federally are also allowed.
For homeowners billed by Wake County, the 2026 property tax bill was due September 1 and can be paid without interest through January 5, 2027. Keep the paid bill with your return records.
New federal deductions stay off the state return.
Because the state starts from federal adjusted gross income, the federal deductions for tips, overtime, car loan interest, and seniors do not reduce North Carolina income. Our page on North Carolina and the tips and overtime deductions walks through it.
Business owners see a difference too: North Carolina adds back 85% of federal bonus depreciation. The year-end planning guide for business owners covers that adjustment.
Estimated payments and extensions.
You owe North Carolina estimated tax when your tax after withholding and credits is expected to be $1,000 or more. The four payments are due April 15, June 15, September 15, and January 15, so the last 2026 payment is due January 15, 2027.
An automatic federal extension carries over to the state return. Without one, file Form D-410 by April 15. Either way, an extension gives more time to file, not more time to pay.
COMMON QUESTIONS
Questions you may have.
What is the North Carolina income tax rate for 2026?
A flat 3.99%. Under Session Law 2026-41, it drops to 3.49% for 2027.
What is the North Carolina standard deduction for 2026?
$12,750 for single filers, $19,125 for heads of household, and $25,500 for married couples filing jointly.
Does a federal extension extend my North Carolina return?
Yes. An automatic federal extension carries over to the North Carolina return. It extends the time to file, not the time to pay.
When is the 2026 North Carolina return due?
April 15, 2027 for calendar-year filers.