NORTH CAROLINA RETIREMENT INCOME TAX · TAX YEAR 2026
Does North Carolina tax Social Security and retirement income?
North Carolina does not tax Social Security benefits. North Carolina taxes pensions and 401(k) and IRA withdrawals, except government pensions vested by August 12, 1989 and military retirement after 20 years of service. A single 67-year-old with $24,000 of Social Security, a $20,000 private pension and $10,000 of IRA withdrawals pays $688 in North Carolina income tax for 2026.
Your estimate
- North Carolina income tax
- $688.28
- Federal income tax
- $1,810.00
- Total income tax
- $2,498.28
Subtracted from North Carolina income
- Social Security
- $11,300.00
Government pensions are treated as not vested under the Bailey settlement (5 years of service by August 12, 1989); vested NC, local and federal retirees deduct them in full. Military retirees are assumed to have 20 years of service or a medical retirement.
North Carolina tax at different retirement incomes
North Carolina income tax for 2026 on a single 67-year-old with $24,000 of Social Security, and on a married couple, both 67, with $20,000 each. Half the pension and IRA income is a private pension and half IRA withdrawals, all received by one spouse in the couple.
| Pension and IRA income | Single | Married |
|---|---|---|
| $20,000 | $289 | $0 |
| $40,000 | $1,087 | $579 |
| $60,000 | $1,885 | $1,377 |
| $100,000 | $3,481 | $2,973 |
| $150,000 | $5,476 | $4,968 |
Does North Carolina tax Social Security?
No. North Carolina deducts all Social Security and Railroad Retirement benefits included in federal adjusted gross income, with no age or income limit.
Of the single 67-year-old's $24,000 in benefits, $11,300 is federally taxable and North Carolina taxes none of it. Of the couple's $40,000, $28,100 is federally taxable and North Carolina taxes none of it.
Does North Carolina tax pensions?
Yes. Private pensions are taxed. Under the Bailey settlement, North Carolina state and local and federal retirees with at least five years of creditable service on August 12, 1989 deduct those pensions in full; the calculator treats government pensions as not vested. Military retirees with at least 20 years of service or a medical retirement deduct their retirement pay.
State tax for a single 67-year-old with $24,000 of Social Security, a $20,000 pension of each type and $10,000 of IRA withdrawals. Excluded is the part of the pension North Carolina exempts.
| Pension | Excluded | State tax |
|---|---|---|
| Private | $0 | $688 |
| North Carolina government | $0 | $688 |
| Federal civil service | $0 | $688 |
| Military | $20,000 | $0 |
Does North Carolina tax IRA and 401(k) withdrawals?
Yes. IRA and 401(k) withdrawals are taxed; North Carolina has no general retirement exclusion. The Bailey exclusion also covers North Carolina state 401(k) and 457 plans for those who contributed before August 12, 1989.
With $24,000 of Social Security, $20,000 of IRA withdrawals and no other income, a single 67-year-old pays $289 in North Carolina income tax for 2026.
At what age do retirement tax breaks start in North Carolina?
No age is needed for any of North Carolina's retirement deductions, and North Carolina has no extra standard deduction at 65.
What the calculator leaves out
Government pensions are treated as not vested under the Bailey settlement (5 years of service by August 12, 1989); vested NC, local and federal retirees deduct them in full. Military retirees are assumed to have 20 years of service or a medical retirement.
The calculator uses North Carolina rules from the 2025 forms and instructions, the latest published.
Federal tax uses the 2026 brackets, the standard deduction with the extra amount at 65, and the $6,000 senior deduction. Estimates assume no other deductions, credits or local taxes except as noted.