2023 – 2024 Senior Citizen State of North Carolina and Federal Tax Deductions
For senior citizens, there are a variety of tax deductions that you may be able to claim on both your North Carolina and Federal Tax Filings. For those who are filing their taxes, looking at the overall tax snapshot of your state and federal taxes is important for perspective. To ensure you’re getting the most out of your money, begin by looking at your income taxes and state and sales tax rates, then progress to social security, retirement accounts, property, additional exemptions, deductions, and refunds. You may be eligible for credits that earn you a larger refund.
North Carolina Has Zero Social Security Tax
North Carolina is one of the many states that does not impose a tax on social security benefits. Taxable Social Security and Railroad Retirement on your federal tax return are exempt from North Carolina Income Tax. However, withdrawals from retirement accounts are fully taxed. Additionally, pension incomes are fully taxed.
Source: North Carolina Department of Revenue – Social Security and Railroad Retirement Benefits
North Carolina Property Tax Advantages, Benefits, Deductions, and Exemptions for Seniors 65 and Older
Homestead Property Exclusion / Exemption
The State of North Carolina excludes from property taxes a portion of the appraised value of permanent residents owned and occupied by North Carolina residents aged 65 or older or totally and permanently disabled whose 2023 income does not exceed $36,700 annually.
Source: Homestead Property Exclusion/Exemption
Circuit Breaker Property Tax Deferment
The Circuit Breaker program allows qualifying individuals the option to defer a portion of the property taxes owed on their permanent residence. Requirements:
- Must be 65 or older or totally and permanently disabled.
- Income does not exceed $55,050.
- Must have owned and occupied the property as the owner’s permanent residence for at least 5 years.
- Must be a North Carolina resident.
Source: North Carolina Department of Revenue – Application for Property Tax Relief
Zero Property Tax in Active Adult Community Living and Senior Retirement Communities
For those 55+ years of age and above, living in an active adult community and senior retirement community is an excellent option. Depending on the home agreement or contract, residents may be able to pay zero property tax on that residence. In addition to zero property tax, some seniors will find that it is cheaper to live in a retirement community after comparing monthly expenditures (home payment, home maintenance and repairs, lawn maintenance, dining/groceries, electricity, water, transportation, internet, etc.).
North Carolina Income Tax Rate 2023
The state of North Carolina has an individual income tax rate of 4.75%.
The state of North Carolina does offer a standard deduction for taxpayers based on filing status:
- Single – $12,750 standard deduction
- Married Filing Jointly/Qualifying Widow(er)/Surviving Spouse – $25,500
- Married Filing Separately
- Spouse does not claim itemized deductions – $12,750
- Spouse claims itemized deductions – $0
- Head of Household – $19,125
Source: North Carolina Department of Revenue – North Carolina Standard Deduction or North Carolina Itemized Deductions and North Carolina Department of Revenue – Individual Income Tax
North Carolina State and Local Sales Tax Rate 2023
North Carolina has a state sales tax of 4.75% and allows local governments to collect up to 2.75% in local sales tax. The total combined tax rate averages at 6.971%
Source: North Carolina Department of Revenue, North Carolina: Sales Tax Handbook.
State of North Carolina and Federal Tax Resources:
State of North Carolina Official WebsiteNorth Carolina Department of Revenue
State of North Carolina – Department of Motor Vehicles (DMV)
United States Internal Revenue Service (IRS)
United States Department of the Treasury
Federal Tax Deductions for Seniors
For those who are 65 and older, in addition to state and local tax deductions there are federal tax deductions and exclusions that may apply to your yearly tax filing. Some of the top deductions are listed below:
What is the Standard Federal Tax Deduction for Seniors Over 65?
The standard tax deduction is a set dollar amount that reduces your overall taxable income. This can vary based on your filing status, age, whether you are blind, or if another taxpayer can claim you as a dependent. Below you will find information for the standard deduction plus an increased deduction for seniors over the age of 65.
2023 Senior Citizen-Standard Income Tax Deduction
In the 2023 tax year (filed in 2024), the standard deduction is $13,850 for Single filers and Married Filing Separately, $27,700 for Married Filing Jointly and Surviving Spouses, and $20,800 for the Head of Household.
For those 65 years of age or legally blind, the standard deduction was increased in 2023 to $1,850 for Single filers or Head of Household, and $1,500 (per person) for married filing jointly, married filing separately, and Surviving Spouses.
2023 Standard Tax Deduction for Seniors Over 65 Years of Age with the Standard Deduction Increase*:
| Filing Status | 2023 Standard Deduction Under 65 Years of Age | 2023 Additional Standard Deduction Over 65 Years of Age | 2023 Total Standard Deduction Over 65 Years of Age* |
| Single (Unmarried and not a Surviving Spouse) | $13,850 | $1,850 | = $15,700 |
| Married Filing Separately | $13,850 | $1,500 | = $15,350 |
| Married Filing Jointly | $27,700 | $1,500 + $1,500 (One deduction for each spouse) | = $30,700 |
| Surviving Spouses | $27,700 | $1,500 + $1,500 | = $30,700 |
| Head of Household | $20,800 | $1,850 | = $22,650 |
* If you are legally blind, there are additional deductions that apply. Check IRS Form 1040 or 1040A and speak with your licensed tax professional to learn more.
To check your 2023 Standard Deduction, visit the Interactive Tax Assistant (ITA) at IRS.gov
2024 Senior Citizen Standard Income Tax Deduction
In the 2024 tax year (filed in 2025), the standard deduction is $14,600 for Single Filers and Married Filing Separately, $29,200 for Married Filing Jointly and Surviving Spouses, and $21,900 for the Head of Household.
For those 65 years of age or legally blind, the standard deduction was increased in 2024 to $1,950 for Single filers or Head of Household, and $1,550 for Married Filing Jointly, Married Filing Separately, and Surviving Spouses.
2024 Standard Tax Deduction for Seniors Over 65 Years of Age with the Standard Deduction Increase*:
| Filing Status | 2024 Standard Deduction Under 65 Years of Age | 2024 Additional Standard Deduction Over 65 Years of Age | 2024 Total Standard Deduction Over 65 Years of Age* |
| Single (Unmarried and not a Surviving Spouse) | $14,600 | $1,950 | = $16,550 |
| Married Filing Separately | $14,600 | $1,550 | = $16,150 |
| Married Filing Jointly | $29,200 | $1,550 + $1,550 (One deduction for each spouse) | = $32,300 |
| Surviving Spouses | $29,200 | $1,550 + $1,550 | = $32,300 |
| Head of Household | $21,900 | $1,950 | = $23,850 |
* If you are legally blind, there are additional deductions that apply. Check IRS Form 1040 or 1040A and speak with your licensed tax professional to learn more.
Each situation is different, but if the standard deduction is less than your itemized deductions, it’s better to itemize and save money. If your standard deduction is more than your itemized deductions, it’s better to opt for the standard deduction. Speak with your licensed tax professional to determine which deduction is correct for you.
Medical and Dental Federal Tax Deductions
For retirees, medical, healthcare, and dental expenses are often one of the largest expenses. According to IRS.gov, if you itemize your deductions for a taxable year on Schedule A (Form 1040 – Itemized Deductions), you may be able to deduct expenses you paid that year for medical and dental care for yourself, your spouse, and your dependents. You may deduct only the amount of your total medical expenses that exceed 7.5% of your adjusted gross income. You figure the amount you’re allowed to deduct on Schedule A (Form 1040). Medical care expenses include payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatments affecting any structure or function of the body.These deductions include prescription drugs, nursing home care, long-term care insurance premiums, insurance premiums (including Medicare), and additional out-of-pocket healthcare expenses. For a full list of acceptable tax deductions, visit IRS.gov’s Medical and Dental Expenses here.
Is Assisted Living Tax Deductible?
For those who are in an assisted living retirement community, there may be medical tax deductions that are associated with the care that is received during that tax year.
Residents of assisted living may be entitled to deduct as a medical expense a portion of the monthly service fees and entrance fees which represent medical care in the year paid. The Internal Revenue Code (IRS) does not contain detailed guidance on how to compute this, therefore each resident should consult their licensed tax professional as to the ultimate deduction and disclosure decisions based on their individual situation.
Monthly service fees paid for assisted living and skilled nursing care may be deducted as medical expenses except those charges for non-medical items such as beauty shop charges or guest meals. This treatment is allowable provided that residents require the services, are chronically ill and the services are provided under a plan of care prescribed by a licensed health care practitioner (IRC Section 7702B(c)).
A resident must meet certain criteria to be eligible for a 100% medical deduction for monthly services fees paid. The resident must be unable to perform, without substantial assistance from another individual, at least two activities of daily living for a period of at least 90 days, or the resident requires substantial supervision to protect their health and safety due to severe cognitive impairment. Activities of daily living include eating, toileting, transferring, bathing, dressing, and continence. The services must also be provided pursuant to a plan of care prescribed by a licensed health care practitioner.
For a full list of acceptable tax deductions, visit IRS.gov’s Medical and Dental Expenses here.
Federal Tax Resources:
United States Internal Revenue Service (IRS)United States Department of the Treasury
IRS Standard Deduction Calculator
IRS Medical and Dental Expenses
Disclaimer: The information above should function as a starting point for your tax research but should not be substituted for direct advice from a licensed tax professional. State and Federal taxes are ever-changing and this list may not be current or up to date with the current tax laws, deductions, relief programs, rebates, requirements, etc. Additional tax deductions, credits, and relief programs may be available depending on your town and county of residence within the State of North Carolina. Check with your local municipality’s tax department, the North Carolina
