(The Center Square) – Taxpayers can begin filing individual income taxes in North Carolina with the state Department of Revenue and federally with the Internal Revenue Service.
Opening day was Monday. The deadline is April 15 for each; extensions to Oct. 15 require Form 4868 to be filed by April 15.
For 2026, or filing the 2025 year, the state individual income tax drops to 3.99% from 4.25%. In the continued phasing down of individual income taxes, there’s a floor of 2.49% contingent on state revenue collections meeting trigger amounts.
In 2010, when Republicans took majorities in both chambers of the General Assembly for the first time in 140 years since Reconstruction, North Carolinians were on an individual income tax system with rates of 6%, 7% and 7.75%, with potential for a surtax on higher earners.
There is no change in the seven federal tax brackets of 10%, 12%, 22%, 24%, 32%, 35% and 37%.
For federal filing, new provisions from the One Big Beautiful Bill Act signed by second-term Republican President Donald Trump on July 4 will be effective. The impacts will be seen in taxes, credits and deductions.
“Prior to the passage of the One, Big, Beautiful Bill, which delivered working families tax cuts, Treasury and IRS were diligently preparing to update forms and processes for the benefit of hardworking Americans, and I am confident in our ability to deliver results and drive growth for businesses and consumers alike,” said Scott Bessent, the interim IRS commissioner.
Subject to income limits, eligible employees can deduct up to $25,000 in tips and $12,500 in overtime pay ($25,000 for married couples). This has been referred to has no tax on tips and overtime, though in accounting terms it is a deduction rather than removal of tax.
Other deductions to the advantage of taxpayers filing are for seniors age 65 (additional $6,000, $12,000 married); the standard deduction rose to $15,750 ($31,500 married filing jointly); and the state and local tax deduction cap colloquially known as SALT increased from $10,000 to $40,000.
Forecasts are for $300 to $1,000 advantages for individual filers, and households with income under $50,000 to get the largest cuts.
Filers are encouraged to check W-2 forms from employers to see if updates listing the new deductions are present.
