On February 17, 2026, North Carolina state officials announced significant changes to taxation laws that will impact residents and businesses in the state. The updates come as part of efforts to streamline and modernize the state's tax system, aimed at creating a fairer and more equitable structure for all taxpayers.One of the key changes announced is the lowering of income tax rates for individuals and corporations. Starting in the upcoming tax year, both individual and corporate tax rates will be reduced by 1%, providing relief for taxpayers across the board. This move is expected to stimulate economic growth and attract more businesses to the state.In addition to the rate reductions, North Carolina will also be implementing a new tax credit for small businesses. The credit is designed to support local entrepreneurs and incentivize job creation and growth within the state. Small businesses will be eligible for a credit equal to 10% of their total tax liability, providing much-needed assistance to this vital sector of the economy.Furthermore, the state will be introducing a tax deduction for individuals who invest in renewable energy sources. North Carolina has long been committed to sustainability and clean energy initiatives, and this new deduction aims to encourage further investment in green technologies. Individuals who install solar panels or other renewable energy systems on their properties will be able to deduct a portion of these costs from their annual tax liability.These changes reflect North Carolina's commitment to creating a more competitive and business-friendly environment, while also supporting individuals and businesses in their efforts to contribute to a more sustainable future. State officials are optimistic that these updates will have a positive impact on the economy and the overall well-being of residents and businesses alike.