North Carolina State Taxes: What You'll Owe in the 2026 Tax Season

Does North Carolina tax Social Security benefits?

No, but you may pay federal taxes on a portion of your Social Security benefits, depending on your “provisional income.” In most cases, provisional income is equal to the combined total of half your Social Security benefits, your adjusted gross income (not including any Social Security benefits) and any tax-exempt interest for the year.

Up to 50 percent of your benefits will be taxed if your provisional income is $25,000 to $34,000 jointly and your provisional income is $32,000 to $44,000.

Up to 85 percent of your benefits will be taxed if your provisional income is more than $34,000 individually or more than $44,000 as a couple.

AARP’s Social Security Calculator can assist you in determining when to claim and how to maximize your Social Security benefits.

How is property taxed in North Carolina?

The average property tax rate in North Carolina was 58 cents per $100 of a home’s assessed value in 2025, according to the North Carolina Department of Revenue.

Property taxes vary widely by county in North Carolina, with the lowest local rate of 0.37 percent in Jackson County, and the highest rate of 1.21 percent in Northampton County, according to the Tax Foundation. The lowest median property tax paid was $753 in Hyde County, while the highest was $4,105 in Orange County, according to 2023 data from the Tax Foundation.

Your property taxes are locally assessed and collected by counties. Your home’s appraised value and the tax rate set by counties and municipalities are used to calculate your property taxes. More information on how your property taxes are calculated is on the North Carolina Department of Revenue website. Information on how to appeal your home’s appraised property value can also be found on the state’s website.

Counties also tax motor vehicles and personal property such as machinery.

What about sales and other taxes?

• Sales tax: North Carolina’s sales tax is 4.75 percent, but municipalities added an average of 2.25 percent in local sales tax in 2025 — and up to 2.75 percent in some parts of the state, according to the Tax Foundation.

Groceries, except for candy and soda, are exempt from state sales tax, but a 2 percent local tax is charged on them. Other examples of sales-tax-exempt items include prescription drugs and some medical supplies.

• Gas and diesel: The motor fuels tax, which includes gasoline and diesel, was 40.3 cents per gallon in 2025 and, in most cases, is charged instead of sales tax. However, sales and use tax are due on certain motor fuel — for which a refund of the motor fuel tax is allowed.
• Vehicle tax: Counties tax motor vehicles. You pay your annual vehicle registration renewal fees and vehicle property taxes at the same time to the Division of Motor Vehicles under its Tag and Tax Together program. The Division of Motor Vehicles then gives the amount you paid in property taxes to your county.
• Alcohol: North Carolina levies a 62-cents-per-gallon excise tax on beer. The state has a 26-cents-per-liter tax on unfortified wine and a 29-cents-per-liter tax on fortified wine, in addition to sales tax. Liquor is sold only in state-run stores and is subject to a 30 percent tax. Excise taxes are paid by the vendor, but some or all may be included in the retail price.
• Lottery: North Carolina taxes all lottery winnings at the state’s 4.25 percent income tax rate for tax year 2025.

Will I or my heirs have to pay inheritance and estate tax in North Carolina?

No, there is no inheritance or estate tax in North Carolina.

Are there any tax breaks for older North Carolina residents?

North Carolina offers three property tax break programs, but only one can be used at a time.

• Homestead property tax exemption: If you are 65 or older and totally and permanently disabled, you may be eligible for a homestead property tax exemption. To qualify, your 2025 income must have been $37,900 or less, and you must own and occupy your home. The state excludes either $25,000 or 50 percent of the appraised value of the home, whichever is greater, from property taxes. The application should be filed during your county’s regular listing period, but may be filed through June 1 of the year for which the exemption is being claimed.
• Circuit breaker program: North Carolina allows qualified homeowners to limit some property taxes through its Circuit Breaker Tax Deferment Program for property tax relief. Check the program application for income eligibility levels and tax rates. The application for the program is due June 1, 2026.

The program allows taxes to be limited to a percentage of a qualifying homeowner’s income. If your taxable income did not exceed $37,900 in the 2025 tax year, your taxes will be limited to 4 percent of your income. If your income is more than $37,900 but less than $56,850, your taxes will be limited to 5 percent of your income.

However, the taxes above these limited amounts are deferred and remain a lien on the property. The last three years of deferred taxes prior to a disqualifying event — if the owner dies, the property is transferred or the home is no longer used as the owner’s permanent residence — will become due and payable, with interest, on the date of the disqualifying event.

• Veterans: Honorably discharged veterans who have a disability or their never-remarried surviving spouse may be eligible for a property tax reduction. North Carolina excludes $45,000 of the appraised value of a permanent residence of the qualifying veteran or spouse. There is no age or income limit for this program.

Are military benefits taxed in North Carolina?

If you are a retired member of the military who served at least 20 years who retired because of a disability, you can deduct your military retirement pay from your North Carolina taxable income. Check the North Carolina Department of Revenue website for more details.

A service member’s spouse may be eligible for deductions.

What is the deadline for filing North Carolina taxes in 2026?

The deadline to file a state tax return for North Carolina is April 15. For help estimating your annual income taxes, use AARP’s Tax Calculator.

The personal income tax extension filing deadline is Oct. 15, although taxes owed are still due by April 15. If you receive an automatic extension to file a federal income tax return, you will get an automatic extension to file a North Carolina income tax return.

If you did not receive an automatic extension to file your North Carolina return, you can request an extension by completing this form. Learn more about extensions here.

Editor’s note: This article was originally published on Feb. 27, 2024. It was updated in 2026 to reflect the most current information.