North Carolina's 2026 tax overhaul cuts rates and boosts deductions for filers
North Carolina taxpayers will see key changes when filing their 2026 individual income taxes with TurboTax. The state's tax rate has dropped to 3.99%, while new deductions for tips, overtime, and seniors have been introduced. Filing opens on today's date, with a deadline of the same date unless an extension is requested.
The state's individual income tax rate now stands at 3.99%, down from previous brackets of 6%, 7%, and 7.75% in 2010. This reduction follows a 2025 law that tied rates to state revenue triggers, ensuring a minimum floor of 2.49%.
Standard deductions have also increased. Individual filers can now claim $15,750, while married couples filing jointly receive $31,500. Seniors aged 65 and older get an extra $6,000 deduction ($12,000 for married couples). New federal provisions under the One Big Beautiful Bill Act affect deductions too. Eligible employees can exclude up to $25,000 in tips and $12,500 in overtime pay from their taxable income. For married couples, the tip deduction doubles to $25,000. Meanwhile, federal tax brackets remain unchanged, ranging from 10% to 37%. The filing period begins on today's date, with the same date serving as the deadline. Taxpayers needing more time can request an extension until October 15.
The 2026 tax season brings lower rates and expanded deductions for North Carolinians using TurboTax. With filing starting and ending on today's date, taxpayers must submit returns or apply for an extension by that date. The changes aim to reduce taxable income for workers, particularly those earning tips or overtime.
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