North Carolina vs South Carolina taxes

Two different shapes

North Carolina is a straight line: a flat 3.99% on income above a standard deduction of $12,750.

South Carolina, since Act 110 took effect for 2026, has two bands: 1.99% on the first $30,000 of taxable income and 5.21% above. In place of the federal deduction it has its own, the SCIAD: $15,000 for a single filer, shrinking once income passes $40,000 and gone at $95,000.

The low first band is why South Carolina wins on smaller salaries. On $50,000 it charges $999 to North Carolina’s $1,486. The shrinking deduction and the higher second rate are why it loses on larger ones. By $75,000 a single filer keeps only $5,460 of the SCIAD, and North Carolina comes out $173 ahead.

Where the lead changes hands

For a single filer, South Carolina keeps more below about $69,000 and North Carolina above it. Once the SCIAD has gone, South Carolina’s 5.21% applies to almost everything, while North Carolina’s 3.99% still sits behind its deduction, and the gap widens: $1,373 on $150,000 and $2,593 on $250,000.

Couples cross at a higher income. South Carolina doubles the SCIAD for joint filers but not its bands: the $30,000 split point is the same for everyone. North Carolina doubles its deduction and keeps its one rate. A couple filing jointly keeps more in South Carolina from about $26,000 to $101,000 of income, and in North Carolina above that. Around the top of that range the two are within a few dollars of each other.

Both rates are heading down

Both states have been cutting on a schedule. North Carolina’s 3.99% is the last step of a phasedown from 5.25%, with further cuts legislated if revenue conditions are met. South Carolina’s Act 110 set a revenue-triggered path from 2027 that lowers the top rate toward 1.99% and then lowers the 1.99% itself. Neither can be priced into a 2026 figure.

One difference moves the other way. North Carolina’s standard deduction is written into statute as a fixed amount and is not indexed for inflation, so it shelters a slightly smaller share of a rising wage each year.

Across the state line

For anyone in the Charlotte area who lives on one side of the line and works on the other, South Carolina’s rules are set out by its Department of Revenue. Nonresidents who work in South Carolina must file there and are taxed only on income earned in South Carolina. Residents are taxed on all their income wherever it is earned, with a credit for tax paid to another state on wages earned in that state. A two-state return is not modeled here: the figures assume you live and work in the same state.

What the take-home figure does not count

Sales tax, property tax and housing costs are not in these figures. Retirees should also know that North Carolina does not tax Social Security benefits, and both states have retirement deductions that a wage calculation does not apply.

Questions people ask

Do you take home more in North Carolina or South Carolina on $75,000?

North Carolina, by $173 a year, or $14 a month, for a single filer in 2026. That counts federal tax, Social Security, Medicare, state income tax and every state payroll deduction.

Is the difference the same at every salary?

No. The side that keeps more changes with the salary: $30,000: South Carolina by $390; $50,000: South Carolina by $487; $75,000: North Carolina by $173; $100,000: North Carolina by $763; $150,000: North Carolina by $1,373; $250,000: North Carolina by $2,593.

I live in North Carolina and work across the line in South Carolina. Do I file there?

Yes. The South Carolina Department of Revenue says nonresidents who work in South Carolina must file a South Carolina return, and are taxed only on income earned in South Carolina, with their deductions prorated. In the other direction, South Carolina taxes its residents on all their income wherever it is earned, and allows a credit for tax paid to another state on wages earned in that state.

Why is South Carolina's real marginal rate higher than its top rate?

Because of the SCIAD, the deduction that replaced the federal one in 2026. Across the middle of the income range it shrinks by about 27 cents for every extra dollar earned, so each dollar raises taxable income by about a dollar and 27 cents. At the 5.21% rate that works out to roughly 6.62%, until the deduction is gone.

Does either state take anything else from a paycheck?

No. Unemployment insurance is paid by employers in both states, neither runs a disability or paid family leave program, and no city or county in either state levies an income tax. The only other deductions are federal.

What this comparison covers

Income tax and payroll deductions on wages: federal income tax, Social Security, Medicare, state income tax, every state payroll deduction. It does not compare sales tax, property tax, housing or the cost of living, which can outweigh the difference in take-home pay. Figures assume the standard deduction, no dependents and no pre-tax retirement contributions. See how we calculate.