$36,086 difference over 30 yearsFor one couple (both 60, $2M, 60/40, $80,000 a year to spend after tax), QuantCalc's 51-state planner study found a median 30-year income-tax bill (federal + state + IRMAA) of $193,609 in California and $229,695 in North Carolina — California is the cheaper state by $36,086.
California vs North Carolina at a glance
| Factor | California | North Carolina |
|---|---|---|
| State income tax | 13.30% top | 3.99% top |
| Taxes Social Security | No | No |
| Taxes 401(k)/IRA | Yes | Yes |
| State estate/inheritance tax | No | No |
| Tax on $100k withdrawal | $1,630/yr | $2,973/yr |
| Retirement-friendliness | high tax | friendly |
| 30-yr median income tax, federal + state + IRMAA (MC) | $193,609 | $229,695 |
| 30-yr state income tax (MC) | $31,115 | $66,569 |
| 30-yr success rate (MC) | 83.37% | 82.57% |
| Median balance at 90 (MC) | $2,082,829 | $2,007,678 |
The income-tax difference, year by year
The simplest way to see the gap: take a married couple, both 65, whose only income is a $100,000 IRA withdrawal split evenly between them. On that withdrawal California collects $1,630 in state income tax and North Carolina collects $2,973 — a difference of $1,343 every year. Both figures are QuantCalc's state tax engine run on the couple's whole 2026 return in each state, so each state's own brackets, deductions, retirement-income exclusions and credits apply. The highest top marginal rate in the U.S., with a mental-health surcharge on income above the surtax threshold. One flat bracket, with the Bailey exemption for qualifying government retirees.
California reaches 13.30% only above $1,000,000 of taxable income: a 12.30% bracket rate plus a 1.00% surcharge on the excess. A $100,000 annual withdrawal never reaches that threshold, so the surcharge adds nothing to the withdrawal figures on this page.
Over a 30-year retirement, QuantCalc's 51-state planner study (one couple, identical portfolio and after-tax spending in both states, only the state changes; every year priced by the planner's federal and state tax engines) puts the median income-tax difference at $36,086.
Beyond income tax
State income tax is only part of the retirement-cost picture. When comparing California and North Carolina, also weigh:
- Property tax — a tax-free-income state can still have high property tax; factor your home value.
- Sales tax — affects every dollar you spend, not just income.
- Estate / inheritance tax — California: none; North Carolina: none. Matters for larger estates.
- Roth conversion cost — converting in the lower-income-tax state of the two cuts the state tax on each converted dollar. See conversion-tax scenarios.
See California vs North Carolina on your full plan
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Compare all states →Converting to Roth before or after the move? See the Roth Conversion Planner.
Compare other states
Deep-dive either state: California retirement tax guide · North Carolina retirement tax guide. Or see the full 50-state comparison and the 51-state Monte Carlo study.
FAQ
Is California or North Carolina better for retirement taxes?
On income tax, California is the lighter-tax state. In QuantCalc's 51-state planner study, one couple (both 60, $2M, $80,000 a year to spend after tax) pays a median $193,609 of federal and state income tax and IRMAA over 30 years in California versus $229,695 in the other — a $36,086 difference on identical income and spending.
Does California tax Social Security and 401(k) withdrawals?
California does not tax Social Security benefits and taxes 401(k)/traditional IRA distributions at the state level. The highest top marginal rate in the U.S., with a mental-health surcharge on income above the surtax threshold.
Does North Carolina tax Social Security and 401(k) withdrawals?
North Carolina does not tax Social Security benefits and taxes 401(k)/traditional IRA distributions at the state level. One flat bracket, with the Bailey exemption for qualifying government retirees.
How much would moving from California to North Carolina save on retirement taxes?
For a married couple, both 65, whose only income is a $100,000 IRA withdrawal split evenly between them, the state income tax is $1,630 in California versus $2,973 in North Carolina — $1,343 per year of difference. Over 30 years, the planner study's median income-tax gap was $36,086. Don't forget property tax, sales tax, and estate tax also differ — see the table above.
Last updated 2026-10-28. State tax data 2026 (Tax Foundation + state DoR); the withdrawal figures are QuantCalc's state tax engine. Monte Carlo figures from the QuantCalc 51-state planner study (v2026.3, re-run 2026-10-12, CC-BY-4.0): one couple, both 60, $2M, 60/40, $80,000 a year to spend after tax, in each state. Educational only, not tax advice.