The most significant change for North Carolina individual income tax returns filed for tax year 2025 is a reduction in the state's flat income tax rate. Taxpayers should also review the current year's filing instructions for updated filing thresholds, deduction amounts, forms, and administrative guidance.
North Carolina Income Tax Rate Reduced
For tax year 2025, North Carolina's flat individual income tax rate decreased from 4.50% to 4.25%. This rate applies to North Carolina taxable income reported on the individual income tax return.
Standard Deduction Amounts
North Carolina taxpayers may claim either the North Carolina standard deduction or North Carolina itemized deductions, whichever provides the greater benefit.
For tax year 2025, the North Carolina standard deduction amounts are:
| Filing Status | Standard Deduction |
|---|---|
| Single | $12,750 |
| Married Filing Jointly | $25,500 |
| Qualifying Widow(er) / Surviving Spouse | $25,500 |
| Head of Household | $19,125 |
| Married Filing Separately (Spouse Does Not Itemize) | $12,750 |
| Married Filing Separately (Spouse Itemizes) | $0 |
Note: North Carolina does not allow an additional standard deduction for taxpayers who are age 65 or older or blind.
Filing Requirement Thresholds
Filing thresholds continue to correspond to North Carolina's standard deduction amounts. Taxpayers whose federal gross income exceeds the applicable threshold for their filing status are generally required to file a North Carolina return.
Taxpayers should review the current filing requirements before determining whether a return is required.