Can you NC residents tell me if NC taxes Federal or State pensions? Thank you.
he Tar Heel State is a favorite destination for retirees. Social Security benefits are exempt from state income taxes. But as part of tax
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http://images.intellitxt.com/ast/adTypes/icon1.png legislation enacted in 2013, other retirement-income breaks were eliminated as of 2014 though standard deduction amounts have been increased. The state has switched from graduated income
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http://images.intellitxt.com/ast/adTypes/icon1.png tax brackets to a flat tax. Other tax changes subject more services to the sales tax and eliminates the estate tax. Real estate is assessed at 100% of appraised value. Homeowners 65 and older may qualify for a homestead exemption.
State Sales Tax
4.75%. Prescription drugs and medical equipment are exempt. Food is subject to a 2% county tax. Localities may add up to 2.75% tax.
Income Tax Range
North Carolina recently replaced their graduated tax system with a flat tax of 5.8% for 2014 and 5.75% for 2015 and beyond.
Social Security
Benefits are not taxed.
Exemptions for Other Retirement Income
Because of legislation enacted in 2013, previous tax breaks for pensions for both government and private employees have been eliminated starting in 2014. However, standard deduction amounts have increased to $15,000 for married filing jointly, $12,000 for head of household, and $7,500 for single/married filing separate.
(A tax break known as the "Bailey exemption" remains; this tax break exempts from taxation certain retirement
benefits received by a state or federal government retiree, if the retiree had five or more years of creditable service as of August 12, 1989.)
Property Taxes
Residential property
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is assessed based on 100% of the appraised value. Taxes are collected by cities and counties.
Median property tax on the state's median home value of $155,500 is $1,209, according to the Tax Foundation.
Tax breaks for seniors: To qualify for the Elderly or Disabled Exclusion, a homeowner must be at least 65 years old or totally and permanently disabled, with income of no more than $28,600 for 2014. The program excludes the first $25,000 or 50% of the home’s appraised value plus the value of up to 1.0 acre of land, whichever is greater, from taxation. The state’s Circuit Breaker Tax Deferment Program limits property taxes to 4% of an owner’s income for those 65 years and older who make less than $28,600 a year for 2014. For those making between $28,600 and $42,900 for 2014, property taxes are limited to 5% of their income.
Inheritance and
Estate Taxes
There is no inheritance tax and no estate tax.
