$4,983 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 $224,712 in New York and $229,695 in North Carolina — New York is the cheaper state by $4,983.
New York vs North Carolina at a glance
| Factor | New York | North Carolina |
|---|---|---|
| State income tax | 10.90% top | 3.99% top |
| Taxes Social Security | No | No |
| Taxes 401(k)/IRA | Yes | Yes |
| State estate/inheritance tax | Yes | No |
| Tax on $100k withdrawal | $2,041/yr | $2,973/yr |
| Retirement-friendliness | high tax | friendly |
| 30-yr median income tax, federal + state + IRMAA (MC) | $224,712 | $229,695 |
| 30-yr state income tax (MC) | $60,156 | $66,569 |
| 30-yr success rate (MC) | 82.88% | 82.57% |
| Median balance at 90 (MC) | $2,032,659 | $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 New York collects $2,041 in state income tax and North Carolina collects $2,973 — a difference of $932 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 brackets in the country, a retirement income exclusion from age 59, and a $6.94M estate cliff. One flat bracket, with the Bailey exemption for qualifying government retirees.
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 $4,983.
Beyond income tax
State income tax is only part of the retirement-cost picture. When comparing New York 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 — New York: has one; 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.
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Deep-dive either state: New York retirement tax guide · North Carolina retirement tax guide. Or see the full 50-state comparison and the 51-state Monte Carlo study.
FAQ
Is New York or North Carolina better for retirement taxes?
On income tax, New York 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 $224,712 of federal and state income tax and IRMAA over 30 years in New York versus $229,695 in the other — a $4,983 difference on identical income and spending.
Does New York tax Social Security and 401(k) withdrawals?
New York does not tax Social Security benefits and taxes 401(k)/traditional IRA distributions at the state level. The highest top brackets in the country, a retirement income exclusion from age 59, and a $6.94M estate cliff.
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 New York 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 $2,041 in New York versus $2,973 in North Carolina — $932 per year of difference. Over 30 years, the planner study's median income-tax gap was $4,983. Don't forget property tax, sales tax, and estate tax also differ — see the table above.
Last updated 2026-10-12. 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.