October 11, 2023
North Carolina law gradually reduces personal income tax rates starting in 2024
Under HB 259, enacted on October 3, 2023, without the signature of Governor Roy Cooper, the personal income tax rate is gradually reduced starting in 2024 until it reaches 3.99% in 2026.
Personal income tax rate reductions under HB 259
Starting in 2027 and through 2034, if general revenue fund targets are met, the personal income tax rate will be lowered to the greater of (1) the prior year's tax rate decreased by one-half percentage point or (2) 2.49%.
Ernst & Young LLP insights
North Carolina joins 11 other states that thus far have enacted legislation in 2023 to reduce their personal income tax rates (Arkansas, Connecticut, Georgia, Indiana, Kentucky, Montana, Nebraska, North Dakota, Ohio, Utah and West Virginia).
Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor