North Carolina Personal Income Tax Laws
Created by FindLaw's team of legal writers and editors | Last reviewed February 21, 2018
State Income Tax in General
Personal income taxes are levied by most U.S. states, while the few states lacking an income tax make up for the revenue in other ways. Only one state, Alaska, has neither an income tax nor a retail sales tax. Revenue from taxes are used to pay for public education, public infrastructure, police, emergency services, government operations, and other shared resources. Other ways states raise revenue include official state lotteries, license fees, and business taxes.
Among the states that do collect an income tax, most have what is known as a "progressive" system (also used by the federal IRS), in which higher earners pay a higher percentage of their income in taxes. But a growing number of states has adopted a so-called "flat" tax, in which all taxpayers pay the same rate. North Carolina is among the flat tax states.
North Carolina Personal Income Taxes at a Glance
North Carolina's personal income tax laws have become relatively straightforward, with a flat tax of 5.75 percent for all filers beginning in the tax year 2015. As in many other states, partnerships are not taxable in North Carolina. Also (as in most other states), North Carolina allows taxpayers to file their annual income taxes online.
Check out the Website for the North Carolina Department of Revenue to learn more about how to pay income taxes in the state.
The following chart contains the most pertinent details of North Carolina's personal income tax laws. See FindLaw's Tax Law section for additional resources, including Avoiding an Income Tax Audit and Who to Call for Tax Questions: Lawyer or Accountant?
|Code Section||105-134, et seq.|
|Who is Required to File||Every individual on North Carolina taxable income, and income of estates and trusts; Partnerships are not taxable|
|Rate||Flat rate of 5.8 percent for 2014 tax year; flate rate of 5.75 percent for post-2014 tax years.|
|Federal Income Tax Deductible||No|
|Federal Income Used as Basis||Yes|
Note: State laws may change at any time, usually through the enactment of newly signed legislation but sometimes through the decisions of higher courts or other means. While we strive to ensure the accuracy of these pages, you also may want to contact a North Carolina tax attorney or conduct your own legal research to verify the state law(s) you are researching.
Research the Law
- North Carolina Law
- Official State Codes - Links to the official online statutes (laws) in all 50 states and DC.
North Carolina Personal Income Tax Laws: Related Resources
Concerned About Your Taxes? Get Help From a North Carolina Tax Attorney
If you are concerned about the flat tax or how North Carolina computes what you owe, it's a good idea to get legal advice before filing. This is particularly true if you have a complicated financial situation. Make sure you are following the applicable tax laws by contacting a North Carolina tax law attorney today.
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