North Carolina Side Hustle Tax Calculator
Calculate your North Carolina state tax (4.25%), federal tax, and self-employment tax on 1099 income.
Last updated: January 2026 · Data from IRS Rev Proc 2024-40
North Carolina offers side hustlers one of the lower flat tax rates in the Southeast at 4.25% for 2025. The Tar Heel State has been steadily reducing its tax rate over the past decade, making it increasingly attractive for freelancers and small business owners. With growing tech hubs in Charlotte and Raleigh-Durham, the state has a thriving gig economy.
How Side Hustle Taxes Work in North Carolina
North Carolina uses a flat tax system with declining rates:
**North Carolina state tax (2025):** - Flat rate: 4.25% - Down from 4.5% in 2024 and 5.25% in previous years - Scheduled to decrease further in coming years
**No local income taxes:** - Charlotte, Raleigh, and other NC cities don't add income taxes - Only pay the 4.25% state rate plus federal taxes
North Carolina's rate is lower than Georgia (5.39%) and similar to Illinois (4.95%), making it competitive for self-employed residents.
What North Carolina Side Hustlers Owe
Let's say you're a single filer in Charlotte with a $58,000 W-2 job and $13,000 in side hustle income from freelance marketing, with $1,500 in expenses.
**Your estimated taxes on the side hustle:** - Net self-employment income: $11,500 - Federal SE tax (15.3% of 92.35%): ~$1,627 - Federal income tax on side income: ~$2,530 (22% bracket) - NC state tax (4.25%): ~$489 - **Total additional tax: ~$4,646**
Your effective rate on the side hustle is about 40%. North Carolina's declining tax rate means you'll keep more each year.
North Carolina Tax Deadlines 2025
North Carolina estimated tax deadlines: - **Q1**: April 15, 2025 - **Q2**: June 15, 2025 - **Q3**: September 15, 2025 - **Q4**: January 15, 2026
Use Form NC-40 for North Carolina estimated tax payments. Electronic payments are available through the NC DOR website.
Common Deductions for North Carolina Freelancers
North Carolina deductions for side hustlers: - NC starts with federal AGI, so federal deductions carry over - Business expenses from Schedule C - Home office deduction - Vehicle and travel expenses - Professional development - NC has specific add-backs and deductions—review NC DOR guidelines
North Carolina Side Hustle Tax FAQ
What is North Carolina's 2025 tax rate?
North Carolina has a flat 4.25% income tax rate in 2025, reduced from 4.5% in 2024. This applies to all taxable income including self-employment earnings.
Does Charlotte have a city income tax?
No, Charlotte and all other North Carolina cities do not have local income taxes. You only pay the state 4.25% flat rate plus federal taxes.
Is North Carolina lowering taxes?
Yes, North Carolina has been steadily reducing its income tax rate. It dropped from 5.25% to the current 4.25%, with potential further reductions planned for future years.
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