Income Taxes by State
Not all state income tax returns and tax rates are the same. Nine states don’t impose a state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire and Tennessee. These states do impose tax on investment income from taxable dividends and interest.
Click on the interactive state map below for specific state deadlines, tax forms, and online tax services (state tax payment, documents, etc.).
North Carolina
North Carolina Income Tax Rate
North Carolina has an individual income tax rate of 5.25% that applies to all income levels.
Income Tax Deductions for North Carolina
North Carolina’s itemized deductions can differ from federal itemized deductions. While there are common deductions, such as home mortgage interest and real estate property taxes, you can also claim a deduction for repayment of claim of right income, qualified charitable contributions and more.
Standard Deduction
The state of North Carolina offers a standard deduction for taxpayers. The 2022 standard deduction allows taxpayers to reduce their taxable income by $10,750 for single filers, $21,500 for married filing jointly and $16,125 for heads of households.
Itemized Deductions
A taxpayer may qualify for the itemized deduction if the amounts exceed the standard deduction. The state of North Carolina allows for itemized deductions as follows:
- Home mortgage interest
- Real estate property taxes
- Qualified charitable contributions
- Medical and dental expenses
- Real estate property taxes
North Carolina taxpayers can deduct up to $20,000 who are both liable for the mortgage, the deduction can only be taken by the spouse who actually paid them.
Qualified Charitable Contributions
You may deduct qualified charitable contributions of up to 60% of your adjusted gross income.
Medical and Dental Expenses
The state of North Carolina allows you to deduct medical and dental expenses that exceed 7.5% of your federal adjusted gross income.
North Carolina State Income Tax Credits
Credit for Income Tax Paid to Another State or Country
If you received income from a source in another state or country and paid tax on it, you can claim a credit for the amount on your North Carolina state tax return to avoid double taxation.
Do I Have to Pay Income Tax in North Carolina?
You are required to file a North Carolina tax return if you receive income from North Carolina and you fall into one of the following categories:
- Resident: You have lived in North Carolina for more than 183 days during the taxable year.
- Part-Year Resident: You became a resident of North Carolina during the tax year or moved and became a resident of another state during the tax year.
- Nonresident: You did not live in North Carolina at any time during the tax year but received income from North Carolina sources.
