Retirement taxes by state
How North Carolina taxes retirement income in 2026
North Carolina has a flat 3.99% income tax. Here's how North Carolina treats Social Security, retirement-account withdrawals, pensions and Roth conversions in 2026 — and what that means in dollars: a retired couple, both 67, with $98,000 of income pays about $978 in North Carolina income tax.
Updated October 2026 · 2026 tax year
North Carolina at a glance
- Flat 3.99% income tax.
- Social Security isn't taxed.
North Carolina retirement tax questions
Does North Carolina tax Social Security?
No. Social Security isn't taxed.
Does North Carolina tax 401(k) and IRA withdrawals?
Yes, at the state's regular income tax rates. North Carolina has no special exclusion for retirement-account withdrawals.
Does North Carolina tax pensions?
Yes, at the state's regular income tax rates. North Carolina has no special pension exclusion.
Does North Carolina tax Roth conversions?
Yes. A Roth conversion counts as income in North Carolina in the year you convert, taxed at the state's regular rates. Qualified Roth withdrawals later aren't taxed.
What is North Carolina's income tax rate in 2026?
North Carolina has a flat 3.99% income tax.
What retirees actually pay in North Carolina: three examples
Calculated with Retirology's tax engine under 2026 law, using each state's standard deduction, its retirement breaks and the 2026 federal rules for how much Social Security is taxable. For the retired couple, North Carolina ranks 44th lowest of the 50 states and DC.
| Household | Total income | North Carolina tax | Share |
|---|---|---|---|
| Retired couple, both 67 $48,000 of Social Security, $40,000 drawn from IRAs and 401(k)s, and $10,000 of qualified dividends | $98,000 | $978 | 1.0% |
| Single retiree, 70 $30,000 of Social Security, a $25,000 pension and $15,000 of IRA withdrawals | $70,000 | $1,087 | 1.6% |
| Early-retired couple, both 56, converting to Roth A $60,000 Roth conversion and $20,000 of long-term gains and qualified dividends, living on savings | $80,000 | $2,175 | 2.7% |
State income tax only — before local taxes, property tax relief and credits not listed above. Federal income tax is extra and the same in every state.
Details and limits
3.99% for 2026; later cuts depend on revenue triggers so aren't assumed. Private retirement income is taxed.
Sources
Rates and rules for the 2026 tax year, from Retirology's state tax data (reviewed October 2026):
This page explains state tax rules in general terms. It isn't tax advice — check your state's official instructions or a tax professional for your situation.