North Carolina Tax Strategy: Tar Heel Freedom Planning
North Carolina has a 4.5% flat income tax that is declining. Combined with federal taxes, over 40% can go to government. Section 7702 provides complete tax freedom.
The North Carolina Tax Challenge
North Carolina's flat 4.5% rate (declining to 3.99% by 2027) is moderate but still adds to federal burden. The state attracts retirees who then face this combined taxation.
✅ The Good News
- Tax rate declining to 3.99% by 2027
- Growing Research Triangle economy
- Popular retirement destination with amenities
⚠️ The Challenge
- Still pay 4.5%+ on all retirement distributions
- Combined state/federal exceeds 40%
- Popularity driving up cost of living
North Carolina Tax By The Numbers
Section 7702: Your Tax Freedom Solution
Section 7702 of the IRS tax code creates a powerful opportunity: access your retirement funds through policy loans that are completely tax-free—at both federal and state levels. For North Carolina residents, this means escaping both the state tax burden and federal taxation entirely.
Federal Tax-Free
Policy loans bypass federal income tax entirely. No 22-37% federal tax on your retirement income.
State Tax-Free
No North Carolina state income tax on policy loans. Your retirement income stays tax-free at the state level.
North Carolina Professionals We Typically Serve
Banking Executives
Charlotte financial center leadership
Research Triangle Professionals
Tech, biotech, and pharma executives
Coastal Retirees
Those relocating to NC beaches
Mountain Retirees
Asheville and Blue Ridge relocations
North Carolina Areas We Serve
Matt Nye's Recommendation
"North Carolina is booming—Charlotte banking, Research Triangle tech, and retirees flooding the mountains and coast. The flat 4.5% rate seems reasonable after leaving New York or California."
"But reasonable is not zero. Combined with federal taxes, you are still losing over 40% of your 401(k) to government. For banking executives, tech professionals, and affluent retirees, that adds up to hundreds of thousands."
"Section 7702 is how you complete the escape. You already made the smart move to NC. Now make the smarter move to tax-free retirement income. That is Tar Heel freedom."
— Matt Nye, 20-Year Industry Veteran
Frequently Asked Questions
How does Section 7702 help North Carolina residents?
Section 7702 allows you to access retirement funds completely tax-free—avoiding North Carolina's 4.5% rate plus federal taxes. Even with declining rates, tax-free beats any percentage.
North Carolina's rate is declining. Should I wait?
Even at 3.99%, you still pay that plus up to 37% federal. Section 7702 provides 0% taxation—now and forever. Waiting means missing years of tax-free growth.
I relocated to NC from a high-tax state. Is this still valuable?
Absolutely. Many relocate thinking NC taxes are low—they are lower but not zero. Section 7702 completes your tax escape. Why settle for partial freedom?
Charlotte banking executives often have stock compensation. How does this fit?
Section 7702 diversifies your tax treatment. Stock compensation is taxed as income. Having tax-free retirement income balances your overall tax exposure.
Ready for North Carolina Tax Freedom?
Discover how Section 7702 can eliminate both state and federal taxes on your retirement income. Schedule your free analysis today.
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