North Carolina State Income Tax Rate 2025: A Comprehensive Guide
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North Carolina State Income Tax Rate 2025: A Comprehensive Guide
Introduction
North Carolina’s state income tax is a progressive tax, meaning that the tax rate increases as taxable income increases. The state’s income tax rates are set by the North Carolina General Assembly and are subject to change each year. This article provides an overview of the North Carolina state income tax rate for 2025, including the tax brackets, deductions, and credits that apply.
Tax Brackets
The North Carolina state income tax rate for 2025 is divided into seven tax brackets. The tax brackets and corresponding tax rates are as follows:
| Taxable Income | Tax Rate |
|---|---|
| $0 – $21,500 | 5.25% |
| $21,501 – $43,000 | 6.9% |
| $43,001 – $64,500 | 7.25% |
| $64,501 – $86,000 | 7.75% |
| $86,001 – $129,000 | 8.25% |
| $129,001 – $215,000 | 8.75% |
| $215,001 and above | 9.25% |
Deductions
North Carolina allows a variety of deductions from taxable income, including:
- Standard deduction: A flat amount that is deducted from taxable income before calculating the tax liability. The standard deduction for 2025 is $10,750 for single filers and $21,500 for married couples filing jointly.
- Itemized deductions: Specific expenses that can be deducted from taxable income, such as mortgage interest, charitable contributions, and state and local taxes.
- Personal exemption: A deduction for each taxpayer and dependent. The personal exemption for 2025 is $4,000.
Credits
North Carolina also offers a number of tax credits, which are dollar-for-dollar reductions in tax liability. Some of the most common tax credits include:
- Earned income tax credit (EITC): A refundable tax credit for low- and moderate-income taxpayers.
- Child tax credit: A credit for each qualifying child.
- Adoption credit: A credit for expenses related to adopting a child.
- Education credits: Credits for expenses related to higher education.
Tax Rates for Nonresidents
Nonresidents of North Carolina are only taxed on income that is sourced from within the state. The tax rates for nonresidents are the same as the tax rates for residents.
Filing Requirements
North Carolina requires all taxpayers with a taxable income of $1,000 or more to file a state income tax return. The filing deadline for the 2025 tax year is April 15, 2026.
Conclusion
The North Carolina state income tax rate for 2025 is a progressive tax, with tax rates ranging from 5.25% to 9.25%. The state allows a variety of deductions and credits that can reduce tax liability. Nonresidents are only taxed on income that is sourced from within the state. Taxpayers with a taxable income of $1,000 or more are required to file a state income tax return.
It is important to note that the North Carolina state income tax rate is subject to change each year. Taxpayers should consult with a tax professional or refer to the North Carolina Department of Revenue website for the most up-to-date information.
Closure
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