Corporate and Personal Income Tax Rate
On June 28, 2017, North Carolina’s Governor Roy Cooper’s veto of the Current Operation Appropriations Act (S.B. 257) was overridden by the House. Subsequently, the legislation will reduce corporate income tax rates from 3 percent to 2.5 percent and the personal income tax rate will decrease from 5.499 percent to 5.25 percent for taxable years beginning on or after January 1, 2019. The legislation lowers the franchise tax on S corporations and increases the personal income tax standard deduction, effective for taxable years beginning on or after January 1, 2019. The franchise tax rate reduction applies to the calculation of franchise tax reported on the 2018 and later corporate income tax returns. Lastly, the legislation replaces the child tax credit with a deduction for each dependent child ranging from $500 to $2,500 based on a taxpayer’s adjusted gross income and filing status, effective for taxable years beginning on or after January 1, 2018.
The law is effective July 1, 2017
Read NC S.B. 257