North Carolina's rate phasedown reaches its final step at 3.99%
Six years of legislated reductions end in 2026. The standard deduction, however, stays frozen at $12,750 — it is not indexed to inflation.
North Carolina’s individual income tax fell from 4.25% to 3.99% for 2026, completing a phasedown that ran 5.25% → 4.99% → 4.75% → 4.5% → 4.25% → 3.99%.
The standard deduction is unchanged at $12,750 single and $25,500 joint. These amounts are written as fixed figures in G.S. 105-153.5(a)(1) and carry no inflation adjustment, so they do not rise each year the way federal amounts do.
That combination is worth understanding: the rate is falling, but a frozen deduction shelters a steadily smaller share of wages as they grow, which offsets part of the cut over time. The gap against the federal standard deduction — $16,100 for a single filer in 2026 — widens every year the statute goes untouched.