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The North Carolina State Income Tax 2023 – 2024

In the economic landscape of North Carolina, the North Carolina State Income Tax is a significant contributor to the state’s revenue. To know more, let’s take a deep dive into the question: what are the rates of North Carolina State Income Tax?
North Carolina State Income Tax
The North Carolina State Income Tax 2023 – 2024
North Carolina State Income Tax is designed to fund various state services and programs, from education to infrastructure development. Navigating this fiscal landscape demands finesse from residents and businesses.
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North Carolina State Income Tax is a major contributor to the state’s revenue. North Carolina operates with a flat income tax rate of 5.25%, simplifying the calculation process. This rate applies to all income levels, providing a straightforward structure for taxpayers. While tax rates play a vital role, changes in personal income, deductions, and exemptions can impact the final tax amount. Filing status rules and residency considerations add layers to this financial canvas. 

Navigating the intricacies of North Carolina State Income Tax for the fiscal year 2022-23, residents and nonresidents alike are obligated to contribute if their income stems from a North Carolina source. The fixed income tax rate is 5.25%, accompanied by a 4.75% sales tax rate. The state extends tax deductions and credits, presenting options like standard deductions or itemized deductions, to alleviate this fiscal responsibility. Also, check out Beem Tax Calculator to get a quick and accurate estimate of your federal and state tax refund for free.

North Carolina State Income Tax

For instance, a North Carolinian earning $70,000 annually would incur a tax of $11,025, translating to an average tax rate of 11.67% and a marginal tax rate of 22%. This marginal rate signifies that any immediate additional income is subject to this tax bracket. Employ the income tax calculator to gauge potential taxes, noting exemptions if income falls below the 2022-2023 standard deduction tailored to filing status, age, and visual impairment.

Does North Carolina Have State Income Tax

Does North Carolina have a state income tax? Indeed, it does. The state imposes a state income tax rate of 5.25%, encompassing all income brackets. While the sales tax rate hovers around 4.75%, the effective tax rate, which reflects the overall tax burden more accurately, stands at 4.08%. For taxpayers in North Carolina, this translates to a state tax liability of approximately $2,857. 

Residents and nonresidents alike must be aware of North Carolina State Income Tax and its rates, as they play a significant role in financial planning and compliance with the state’s tax regulations.

North Carolina State Income Tax – How much will the income after tax in North Carolina with Filing Status

Annual IncomeFiling Status –
Single
Filing Status –
Married Filing Jointly
Filing Status –
Head of Household
$12000$12,000$12,000$12,000
$15000$14,683$15,000$15,000
$20000$18,933$20,000$19,940
$22000$20,633$22,000$21,740
$30000$27,299$29,365$28,715
$35000$31,449$33,616$32,947
$36000$32,279$34,466$33,777
$42000$37,260$39,567$38,758
$45000$39,750$42,117$41,248
$48000$42,241$44,636$43,738
$52000$45,561$47,957$47,059
$54000$48,754$51,277$50,379
$60000$51,674$54,598$53,700
$62000$53,135$56,258$55,360
$65000$55,325$58,748$57,850
$70000$58,975$62,899$62,001
$75000$62,626$67,049$66,151
$80000$71,200$71,200$69,832
$85000$69,927$75,350$73,482
$90000$73,577$79,501$77,133
$92000$75,038$81,161$78,593
$95000$77,228$83,651$80,783
$114000$90,860$98,968$94,544
$115000$91,570$99,698$95,254
$140000$109,323$117,951$113,007
$150000$116,424$125,252$120,108
$160000$123,525$132,553$127,209
$165000$127,075$136,203$130,759
$190000$144,268$154,456$148,467
$185000$141,118$150,805$144,961
$260000$187,442$204,444$191,835
$300000$211,446$232,848$215,839
$350000$241,451$268,353$268,353
$120000$95,121$103,349$98,805
$135000$105,772$114,300$109,456
$170000$130,626$139,854$134,310
$180000$137,727$147,155$141,411
$250000$181,441$197,343$185,834
$28000$25,639$27,665$27,015
$32000$28,959$31,066$30,416
$40000$35,600$37,866$37,098
$44000$38,920$41,267$40,418
$53000$46,391$48,787$47,889
$56000$48,754$51,277$50,379
$58000$50,214$52,937$52,039

North Carolina State Income Tax Rates And Tax Brackets

When delving into North Carolina State Income Tax rates and tax brackets, it’s evident that North Carolina maintains a straightforward approach. The individual income tax rate is a flat 5.25 percent, making it easy to calculate tax liabilities. 

The state imposes a flat income tax rate of 5.25%, applicable to all income levels. Notably, the marginal tax rate is slightly lower at 4.99%, while the effective tax rate typically amounts to 4.08%. This translates to an annual North Carolina state tax liability of approximately $2,857 for the average taxpayer.

What Is North Carolina’s Standard Deduction?

When considering North Carolina State Income Tax, it’s crucial to understand the standard deductions. North Carolina does indeed have state income tax, and it offers a standard deduction based on your filing status:

Filing StatusStandard Deduction
Single$12,750
Married Filing Jointly/Qualifying Widow(er)/Surviving Spouse$25,500
Married Filing Separately (Spouse does not claim itemized deductions)$12,750
Married Filing Separately (Spouse claims itemized deductions)$0
Head of Household$19,125
Table 1.0. North Carolina’s Standard Deduction Rates by Filing Status

How To Calculate North Carolina State Income Tax

Calculating North Carolina State Income Tax is straightforward for the tax year 2023. Regardless of income level, all taxpayers are subject to a flat state income tax rate of 5.25%. This rate applies to your taxable income, which is your total income minus qualifying deductions, exemptions, and any contributions to retirement plans such as a 401(k) or an IRA. 

For instance, if your taxable income is $50,000, your North Carolina state income tax would be $2,625 (5.25% of $50,000). Understanding these calculations ensures accurate compliance with the state’s tax regulations.

Also Read: Arkansas Self-employment Tax

Do I Have To Pay North Carolina State Income Tax?

Understanding the complexities of taxation raises the question: “Do I need to pay North Carolina State Income Tax?” Yes, if you receive income from North Carolina and fit into one of these categories:

  • Resident: Living in North Carolina for over 183 days in the taxable year.
  • Part-Year Resident: Becoming a resident during the tax year or relocating to another state as a resident.
  • Nonresident: Not residing in North Carolina during the tax year but earning income from North Carolina sources. Understanding these criteria is essential to comply with North Carolina State Income Tax regulations.

How To Pay North Carolina State Income Tax

North Carolina State Income Tax gives various tax-paying options. 

  • To fulfill this financial obligation, taxpayers can utilize various methods. Online payments, made through our secure portal using credit/debit cards (Visa/MasterCard) or bank drafts, offer convenience. 
  • Alternatively, individuals can contact an agent at 1-877-252-3252 for assistance. 
  • Traditional methods like personal checks, money orders, or cashier’s checks are also accepted. Ensuring timely and accurate payment aligns with North Carolina’s tax regulations. So, whether online or through traditional means, meeting your North Carolina State Income Tax duties is an accessible and flexible process.

Am I A Resident For North Carolina Income Tax Purposes?

Establishing a domicile for North Carolina State Income Tax holds significance, with distinctive criteria for residents, part-year residents, and nonresidents.

Resident Status Rules

To qualify as a ‘resident’ for income tax purposes, one must maintain a domicile within North Carolina throughout the tax year or reside in the state for non-temporary reasons. If you stay for more than 183 days in North Carolina state, It’s applicable for paying resident status income tax. 

Part-Year Resident Status Rules

Transitioning domicile within the tax year places individuals in part-year resident status, per G.S. § 105-153.4(c) 17 NCAC 06B.3903.

Nonresident Status Rules

G.S. § 105-153.3(11) outlines a ‘nonresident individual’ as someone lacking residency in North Carolina. This includes those temporarily residing in the state with domicile elsewhere or individuals earning income in North Carolina while domiciled elsewhere. Comprehending these distinctions is fundamental for precise adherence to North Carolina State Income Tax regulations.

Where Is My North Carolina State Income Tax Refund

Do you know the status of your North Carolina State Income Tax refund? North Carolina’s Department of Revenue is your trusted source. You can track your NC state tax refund status through the “Where’s My Refund?” online service or by dialing their toll-free refund inquiry line at 1-877-252-4052. Remember to have your social security number and the exact refund amount on hand for verification. 

North Carolina State Income Tax

It’s important to note that if you owe money to a State agency or the IRS or your return contains errors, processing your refund may take additional time. Plus, if your refund isn’t issued within 45 days from the filing date or the due date of your return, you’ll receive refund interest. Moreover, you can also consider Beem’s tax assistant for tax refund information.

Ensure a smooth process when dealing with your North Carolina State Income Tax refund by utilizing these resources provided by the North Carolina State Department of Revenue.

Why Did My North Carolina State Income Tax Increase

The increase in your North Carolina State Income Tax can be attributed to fiscal adjustments in tax rates and policies. Notably, the individual income tax rate in North Carolina was reduced from 5.25% to 4.99% in 2021. However, for the 2022-2023 fiscal year, there was a moderate uptick back to 5.25%. 

This adjustment reflects the state’s strategic fiscal planning to address budgetary needs and maintain financial stability. Understanding these changes is crucial, especially in a state with a state income tax — North Carolina. 

North Carolina Sales Tax

In North Carolina, beyond considering North Carolina State Income Tax, it’s crucial to understand the North Carolina State sales tax landscape. Currently fixed at 4.75%, this rate can reach 7.5% with local taxes. Most counties see a total sales tax ranging from 6.75% to 7%. Registering with the North Carolina Department of Revenue is mandatory if you’re selling tangible goods or specific digital items. 

Each county tacks on its rate, ranging from 2% to 2.25% in most areas. For example, Durham and Orange counties implemented an extra 0.5% tax to support regional public transportation. Consequently, the statewide sales tax fluctuates from 6.75% to 7.50%. Understanding this interplay of state and county levies is essential for consumers and businesses navigating North Carolina’s diverse fiscal terrain.

Also Read: New Mexico Self-Employment Tax

5 Things To Know About North Carolina Income Tax

North Carolina income tax involves key considerations that impact individuals and businesses alike. Here are five crucial aspects to be aware of:

Progressive Tax Rates

North Carolina operates on a progressive tax system. This means that as your income increases, so does the percentage of income tax you pay. Currently, rates range from 5.25% for lower-income brackets to 7.25% for higher earners. 

Deductions and Credits

Taxpayers can optimize their tax liability by leveraging deductions and credits. North Carolina provides options for standard or itemized deductions and various tax credits that can significantly reduce the overall tax burden.

Filing Status Matters

Your filing status, whether single, married, jointly, or in another category, impacts your tax obligations. Additionally, age-related factors can influence the availability of certain deductions.

Sales Tax Impact

Beyond income tax, North Carolina also levies sales tax. Understanding the sales tax structure, which includes state and local components, is essential for individuals and businesses making purchases. Rates can vary depending on your location within the state.

Residency Rules

Residency status determines how you’re taxed. Whether you’re a full-year resident, part-year resident, or nonresident influences the application of tax laws. This distinction is crucial for complying with North Carolina’s income tax regulations.

Conclusion

In summary, North Carolina State Income Tax, with rates from 5.25% to 7.25%, plays a significant role in the state’s money matters. North Carolina State Income Tax is crucial to how the state manages its finances. It’s like a piece of the puzzle that helps pay for essential things like schools and roads. The tax rates can vary depending on how much money you make, and understanding these rates is important for everyone, whether you’re an individual or a business. By knowing how it works, you can make smarter financial decisions and contribute to the well-being of North Carolina.

You can file personal tax returns online for both Federal and state to get the maximum refund, even if you have worked in multiple states or have multiple W-2s.

FAQs

Q. Is North Carolina a high-tax state?

A. No, North Carolina is not considered a high-tax state.

Q. Is North Carolina a tax-friendly state?

A. North Carolina is not the most tax-friendly state, but it has a flat income tax rate of 5.25%, which is relatively moderate.

Q: Is North Carolina a good place to live for taxes?

A. North Carolina is an excellent place to live for taxes, given its lower tax burden, including a flat income tax rate of 5.25%.

Q. How much of my paycheck goes to taxes in North Carolina?

A. The amount of your paycheck that goes to taxes in North Carolina depends on your income. Still, the state has a progressive income tax system with rates ranging from 5.25% to 7.25%.

Q. Does North Carolina tax income earned in another state?

A. Yes, North Carolina taxes income earned in another state for residents.

Q. Does the state of North Carolina tax social security income?

A. No, North Carolina does not tax social security income.

Q. Can North Carolina state income tax go up?

A. Tax rates can change based on legislative decisions, but there are plans to reduce the state income tax rate in the coming years.

Q. Do seniors have to pay state income tax in North Carolina?

A. Seniors in North Carolina are generally subject to the same income tax rules as other residents.

Q. Does North Carolina have a state income tax for the military?

A. If military personnel are domiciled (legal residence) in North Carolina, they are subject to state income tax.

Q. What are North Carolina’s state income taxes for LLCs?

A. As of 2023, the tax rate for North Carolina corporations (including LLCs) is a flat 2.5% taxable income.

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Prem Kishan

A seasoned Product Manager who thrives on making a meaningful impact within the organization, Prem is deeply passionate about tackling intricate problems using cutting-edge technology and is a specialist in tax content.

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This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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