If you live in North Carolina (or you’re looking to move here), then a bill recently passed into law by the N.C. Legislature might give you some relief from taxes. The bill was vetoed by Governor Roy Cooper, but the Legislature overrode his veto to pass the bill on June 28, 2017. The new law makes three beneficial changes to the State’s current tax code that you will want to be aware of as a resident (or soon to be resident) of North Carolina. These three changes will become effective as of January 1, 2019, except for the corporate income tax rate as stated below. The bill also set forth a budget plan and created an incentive program to bring new jobs to North Carolina.
(1) Personal Income Tax Rate
The personal income tax rate will drop to 5.25% for a taxpayer’s North Carolina taxable income. The 2017 personal income tax rate is 5.499%.
(2) Corporate Income Tax Rate
The corporate income tax rate will drop to 3% for every C corporation doing business in the State, effective as of January 1, 2017. The corporate income tax rate will drop even further to 2.5% for taxable years beginning January 1, 2019. The current corporate income tax rate is 4%.
|New corporate tax rates may bring about a spring of new business in North Carolina.|
(3) Standard Deduction Increased
Additionally, each filing status will see an increase in the standard deduction.
- Married, filing jointly/surviving spouse $20,000 (currently $17,500)
- Head of Household $15,000 (currently $14,000)
- Single $10,000 (currently $8,750)
- Married, filing separately $10,000 (currently $8,750)
For more information on Attorney Kelly J. Brown, or the other business & contract lawyers at McGrath and Spielberger, PLLC, please visit McGrathSpielberger.com.