Who qualifies for the $6,000 deduction.
You must be 65 by the last day of the tax year. Each qualifying person needs a Social Security number on the return, and married couples must file jointly. The deduction runs for 2025 through 2028 and is claimed on the new Schedule 1-A, so you get it whether you itemize or take the standard deduction.
How it stacks with the standard deduction.
For 2026, the IRS lists a standard deduction of $16,100 for single filers and $32,200 for married couples filing jointly. People 65 or older already add $1,650 each, or $2,050 if unmarried. The new $6,000 senior deduction comes on top of both.
A married couple in Fuquay-Varina, both over 65, with modest retirement income could see more than $47,000 in total deductions before itemizing anything. That can change whether itemizing is worth it at all.
Where the phase-out starts.
The deduction drops by 6% of modified adjusted gross income above $75,000, or $150,000 jointly. A single filer with $95,000 of modified adjusted gross income loses $1,200 of the $6,000. Large IRA withdrawals or a property sale in the same year can push income into that range, so the timing of withdrawals is worth a look before year-end.
What North Carolina taxes, and what it does not.
North Carolina starts from federal adjusted gross income and has not adopted the federal senior deduction, according to the Department of Revenue's guidance on recent law changes. Several retirement items still come off on the state side.
- Social Security benefits are deducted, so they are not taxed by North Carolina.
- Military retirement pay is deducted for retirees with at least 20 years of service, or those medically retired.
- Government retirees covered by the Bailey decision, generally those with five or more years of creditable service as of August 12, 1989, can exclude that retirement income.
Other pensions, IRA withdrawals, and 401(k) distributions are generally taxed by North Carolina at the 2026 flat rate of 3.99%. Our guide to the 2026 North Carolina return covers the rest of the state return.
COMMON QUESTIONS
Questions you may have.
Do I have to be 65 for the whole year to get the senior deduction?
No. You must turn 65 on or before the last day of the tax year, so turning 65 on December 31, 2026 counts for 2026.
Can married couples filing separately claim the senior deduction?
No. Married couples must file jointly to claim it.
Does North Carolina tax Social Security?
No. North Carolina deducts Social Security benefits from income on the state return.