Updated October 2, 2026. Quick answer: North Carolina’s individual income tax rate for tax year 2026 is 3.99%. The Department of Revenue says it follows from Session Law 2023-134. Employer withholding tables use 4.09%, which is the 3.99% rate plus 0.1%, so a paycheck can be withheld at a higher rate than the return charges.
The 2026 rate
The Department’s 2026 withholding publication says: “the individual income tax rate for tax year 2026 will be 3.99%”, and that this follows from “Session Law 2023-134”. The same publication says the change is reflected in the tables and computations it contains.
Why withholding uses 4.09%
The percentage-method tables say the withholding calculations “are based on the individual income tax rate of 3.99% plus 0.1%”, which gives “a withholding tax rate of 4.09%”. The publication builds its withholding tables on that extra tenth of a percent; the income tax rate it names for 2026 is 3.99%.
A worked example
As a computed example (an illustration, not a source figure), take $70,000 of North Carolina taxable income in 2026. At 3.99% the tax is $2,793 (computed), and a withholding calculation at 4.09% on the same amount gives $2,863 (computed). The difference is $70 (computed). Taxable income here is the figure after the state standard deduction, not wages.
What this page does not say
The publication names one rate for 2026. It does not say whether later years’ rates are certain, and this page does not predict them. For how the state treats pensions, Social Security and withdrawals, read the North Carolina retirement taxes page.
Common mistakes
- Quoting 4.09% as the income tax rate. It is the withholding rate.
- Using the pre-2026 rate for a 2026 return.
- Applying the rate to gross wages instead of taxable income after the standard deduction.
- Reading a paycheck’s withholding as the year’s final tax.
Related: how North Carolina taxes retirement income, whether North Carolina taxes pensions, whether North Carolina taxes Social Security, and the federal 2026 tax brackets.
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Sources
- North Carolina Department of Revenue, 2026 Income Tax Withholding Tables and Instructions for Employers: https://www.ncdor.gov/income-tax-withholding-tables-and-instructions-employers/open
- North Carolina Department of Revenue (where later updates appear; no figure on this page comes from it): https://www.ncdor.gov/
Sources: the primary documents linked above, read on October 2, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.