North Carolina: 3.99% Flat State Income Tax Rate (2026)
North Carolina has one of the lowest flat income tax rates in the country. In 2026, the rate is 3.99%, down from 4.25% in 2025, continuing a multi-year path of reductions under legislation passed in 2021. The Research Triangle (Raleigh-Durham-Chapel Hill) and Charlotte are two of the fastest-growing tech and finance markets in the US.
North Carolina flat income tax (2026): 3.99% × $150,000 = $5,985. Flat rate, no brackets.
At 3.99% flat, North Carolina income taxes are among the lowest of states that do levy an income tax. A $150,000 salary generates approximately $5,985 in North Carolina state income taxes, lower than Georgia (4.99%), Illinois (4.95%), and significantly lower than California (effective roughly 8 to 9%). North Carolina's rate is scheduled to continue declining in future years under existing legislation.
Research Triangle Park, one of the largest research parks in the world, anchors a tech ecosystem that includes major presences from Apple, Google, IBM, Cisco, and Red Hat. Duke University, UNC Chapel Hill, and NC State provide a strong talent pipeline. Raleigh's cost of living is approximately 7% below the national average, and Charlotte's is roughly at or slightly below average.
North Carolina also has no local income taxes and a moderate state sales tax of 4.75% (with local additions up to 7.5% in some counties). The overall tax environment is competitive with Sun Belt peers like Georgia and meaningfully lower than coastal states.
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Total Comp CalculatorFrequently asked questions: North Carolina income tax
What is North Carolina's state income tax rate in 2026?
North Carolina's flat income tax rate is 3.99% in 2026, reduced from 4.25% in 2025. North Carolina passed legislation in 2021 to reduce the rate in annual steps, and it is scheduled to continue declining toward 2.49% by 2030 if revenue targets are met.
Does North Carolina have a graduated income tax?
No. North Carolina converted to a flat income tax structure and has been reducing the rate annually. The 3.99% rate applies uniformly to all taxable income.
How does North Carolina compare to other Southeast states for income tax?
North Carolina's 3.99% flat rate is lower than Georgia's 4.99%, South Carolina's graduated rates (up to 6.2%), and Virginia's graduated rates (up to 5.75%). Tennessee and Florida have no income tax. North Carolina sits in a favorable middle position: low but not zero.
Tax rates shown reflect the best available 2026 information and are provided for informational purposes only. State income tax rates, brackets, and rules change frequently. This page is not tax advice. Consult a qualified tax professional for advice specific to your situation. © CompCalc — compensationcalculator.xyz