2023 North Carolina individual income tax rates

Rate: Effective Jan 1, 2023 the NC individual income tax rate is a flat 4.75%. of NC taxable income (federal adjusted gross income (AGI) + - certain allowed NC adjustments less NC standard deduction or itemized deductions).

Individual income taxes (resident, part-year resident or non-resident) are reported on Form D-400.

Standard deduction amounts effective Jan 1, 2023

Itemized deductions:

• Unlimited itemized deductions for charitable contributions are allowed
• Combined mortgage interest and property tax deductions are capped at $20,000 (married filing jointly), $16,000 (heads of households) and $10,000 (single or married filing separately).
•  Most federal itemized deductions are allowed by NC.

Personal exemption deduction: Eliminated for 2014 and forward

Pension income:

• Private retirement deduction up to $2,000 per person and government retirement up to $4,000 per person eliminated for 2014 and forward
• No change in exempt treatment of “vested” participants in NC-exempt pensions (Bailey Settlements).
• Social Security benefits remain untaxed in NC.