North Carolina Income Tax Rate For 2023
North Carolina has one individual income tax bracket with a flat rate of 4.75%. Below you will find 2023 North Carolina tax brackets and tax rates for all four NC filing statuses. The North Carolina tax rate and tax brackets tabulated below are based on income earned between January 1, 2023 through December 31, 2023. Individual taxpayers will submit both their federal tax forms and state tax forms by April 15, 2024.
The North Carolina tax rate decreased from 4.99% last year (2022) to 4.75% this year (2023). The current year 2023 North Carolina income tax rate of 4.75% continues the downward trend in rates from a high of 5.8% in 2014. Outlook for the 2024 North Carolina income tax rate is to decrease further to 4.5% of taxable income. Additional reductions are currently scheduled at 4.25% for 2025 and 3.99% for tax year 2026.
North Carolina Income Tax Calculation For $70,000 In Wages
- Tax Year: 2023
- Filing Status: Single
- North Carolina Tax Rate: 4.75%
- North Carolina Standard Deduction: $12,750
- North Carolina Income Tax Estimate: $2,719
- North Carolina Effective Tax Rate: 3.88%
To simplify and standardize the calculation across states, we assume the taxpayer has only income from Wages, salaries, tips, etc Line 1 on federal Form 1040. North Carolina Form D-400 begins with federal adjusted gross income, 1040 Line 11. That means we must subtract the state standard deduction amount of $12,750 from our 2023 wages. The result is our North Carolina taxable income, which we can then multiply by the 2023 North Carolina tax rate of 4.75%.
North Carolina Income Tax = ( $70,000 - $12,750 ) × 4.75% = $2,719
To calculate the effective income tax rate for the state of North Carolina, we simply divide the previously calculated income tax estimate by our initial $70,000 in wages.
North Carolina Effective Tax Rate = $2,719 ÷ $70,000 = 3.88%
The actual amount of income tax you will pay in the state of North Carolina will vary. North Carolina, as with other states, often allow taxpayers to make additions and subtractions to their federal taxable income. Many states also offer credits for families with children, charitable contributions, and environmental initiatives, for example.
North Carolina 2023 Income Tax Brackets by Filing Status
| Tax Bracket | Tax Rate |
|---|---|
| $0+ | 4.75% |
| Tax Bracket | Tax Rate |
|---|---|
| $0+ | 4.75% |
| Tax Bracket | Tax Rate |
|---|---|
| $0+ | 4.75% |
| Tax Bracket | Tax Rate |
|---|---|
| $0+ | 4.75% |
Please reference the North Carolina tax forms and instructions booklet published by the North Carolina Department of Revenue to determine if you owe state income tax or are due a state income tax refund. North Carolina tax forms are generally published at the end of each calendar year, which will include any last minute 2023 - 2024 legislative changes to the NC tax rate or tax brackets. The North Carolina tax brackets and tax rates calculated on this web page are to be used for illustration purposes only.
Frequently Asked Questions
Which North Carolina tax bracket am I in?
In the state of North Carolina there is just one personal income tax bracket. Every individual taxpayer is therefore in the same bracket regardless of filing status and amount.
What is the North Carolina income tax rate for 2023?
North Carolina's 2023 income tax rate is 4.75%.
What is North Carolina's marginal tax rate?
The current flat tax rate for North Carolina is 4.75%. The North Carolina marginal tax rate used in our example calculation above on this page is 4.75%. That is the tax rate applied to each additional dollar of taxable income you earn. Since North Carolina is a flat tax rate state, the nominal or official tax rate equals the marginal tax rate.
What is North Carolina's effective tax rate?
North Carolina's effective tax rate is 3.88%. Effective tax rate equals the total tax paid divided by total taxable income. Find our North Carolina tax rate calculations above on this page for more information.
How much state income tax will I pay in North Carolina?
The national average adjusted gross income (AGI) reported by the IRS each year is about $70,000. A single North Carolina taxpayer with $70,000 in wages would pay approximately $2,719 to the North Carolina Department of Revenue. Find our North Carolina tax rate calculations above on this page for more information.
Does North Carolina have a standard deduction?
Yes. North Carolina does have a standard deduction of $12,750 for Single and $25,500 for Married Filing Jointly filing statuses.
Does North Carolina have a personal exemption?
No. North Carolina does not have a personal exemption for 2023.
Does North Carolina have a dependent exemption?
No. North Carolina does not have a dependent exemption for 2023.
Is North Carolina a flat tax state?
Yes. North Carolina's state income tax rate is a flat 4.75% of your taxable income. Regardless of your income level, you will pay the same rate. There are nine flat tax rate states in the United States: Colorado, Illinois, Indiana, Kentucky, Massachusetts, Michigan, North Carolina, Pennsylvania, and Utah
Last updated: November 4, 2023
References:
- Tax Rate Schedules. North Carolina Department of Revenue, State of North Carolina. Retrieved November 4, 2023.
- Personal Income Tax Rate Reductions (PDF). Session Law 2023-134, House Bill 259, General Assembly of North Carolina. Retrieved November 4, 2023.
- North Carolina Standard Deduction or North Carolina Itemized Deductions. North Carolina Department of Revenue, State of North Carolina. Retrieved November 4, 2023.