AN ACT to enact the caring for our caregivers act.

The General Assembly of North Carolina enacts:

INCOME TAX EXEMPTION

SECTION 1.(a)  G.S. 105‑153.7 reads as rewritten:

§ 105‑153.7.  Individual income tax imposed.

(a)        Tax. – A tax is imposed for each taxable year on the North Carolina taxable income of every individual. The tax shall be levied, collected, and paid annually. Except as otherwise provided in subsection (a1) of this section, the tax is a percentage of the taxpayer's North Carolina taxable income computed as follows:shall be computed at the following percentages of the taxpayer's income for taxable year 2025 and computed at the following percentage reduced by twenty‑six hundredths percent (0.26%) for taxable years after 2025:

Taxable Years Beginning                   Tax

In 2022                                    4.99%

In 2023                                    4.75%

In 2024                                    4.5%

In 2025                                    4.25%

After 2025                               3.99%.

(1)        For married individuals who file a joint return under G.S. 105‑153.8 and for surviving spouses, as defined in section 2(a) of the Code:

                                             Over                                  Up To                                            Rate

                                                     ‑0‑                          1,000,000                                           4.25%

                                      $1,000,000                                      NA                                           5.05%

(2)        For heads of households, as defined in section 2(b) of the Code:

                                             Over                                  Up To                                            Rate

                                                     ‑0‑                           $800,000                                           4.25%

                                         $800,000                                      NA                                           5.05%

(3)        For unmarried individuals other than surviving spouses and heads of households:

                                             Over                                  Up To                                            Rate

                                                     ‑0‑                             600,000                                           4.25%

                                         $600,000                                      NA                                           5.05%

(4)        For married individuals who do not file a joint return under G.S. 105‑153.8:

                                             Over                                  Up To                                            Rate

                                                     ‑0‑                             500,000                                           4.25%

                                         $500,000                                      NA                                           5.05%

(a1)      Rate Reduction Trigger. – Notwithstanding the tax rates set out in subsection (a) of this section, if total General Fund revenue in a fiscal year set out below exceeds the trigger amount indicated for that fiscal year, then the applicable tax rate for the indicated and subsequent tax years shall be equal to the greater of (i) the prior taxable year's rate decreased by one‑half percentage point (0.50%) or (ii) two and forty‑nine hundredths percent (2.49%). For purposes of this subsection, total General Fund revenue is the amount stated in the final accounting of total General Fund Reverting Net Tax and Non‑Tax Revenues for the fiscal year, as reported by the Office of State Controller in August following the end of the fiscal year.

Fiscal Year                     Trigger Amount             Taxable Year Beginning

FY 2025‑2026                $33,042,000,000                         In 2027

FY 2026‑2027                $34,100,000,000                         In 2028

FY 2027‑2028                $34,760,000,000                         In 2029

FY 2028‑2029                $35,750,000,000                         In 2030

FY 2029‑2030                $36,510,000,000                         In 2031

FY 2030‑2031                $38,000,000,000                         In 2032

FY 2031‑2032                $38,500,000,000                         In 2033

FY 2032‑2033                $39,000,000,000                         In 2034

(b)        Withholding Tables. – The Secretary may provide tables that compute the amount of tax due for a taxable year under this Part. The amounts of the tax determined under the tables shall be computed on the basis of the rates prescribed by subsection (a) of this section. The tables do not apply to an individual who files a return under section 443(a)(1) of the Code for a period of less than 12 months due to a change in the individual's annual accounting period or to an estate or trust.

SECTION 1.(b)  G.S. 105‑153.5(b) is amended by adding a new subdivision to read:

(6a)    Income earned for work performed as one of the following:

a.         Firefighter.

b.         Emergency medical services personnel, including the following:

1.         Emergency medical responder.

2.         Paramedic.

3.         Rescue squad member.

c.         Emergency management worker.

d.         911 call center worker.

e.         Sworn law enforcement officer with the power of arrest.

f.          Child care worker.

g.         Public school unit employee.

h.         Probation or parole officer.

i.          Corrections officer.

SECTION 1.(c)  This section is effective for taxable years beginning on or after January 1, 2025.

BENEFITS FOR CAREGIVER WORKERS

SECTION 2.(a)  For the purposes of this section, a qualifying caregiver worker is any individual who meet both of the following requirements:

(1)        Has an annual household income that does not exceed one hundred twenty‑five thousand dollars ($125,000).

(2)        Is employed in the State at least 30 hours a week as one of the following:

a.         Firefighter.

b.         Emergency medical services personnel, including the following:

1.         Emergency medical responder.

2.         Paramedic.

3.         Rescue squad member.

c.         Emergency management worker.

d.         911 call center worker.

e.         Sworn law enforcement officer with the power of arrest.

f.          Child care worker.

g.         Public school unit employee.

h.         Probation or parole officer.

i.          Corrections officer.

SECTION 2.(b)  There is appropriated from the General Fund to the Department of Health and Human Services, Division of Child Development and Early Education, the sum of one hundred sixty‑five million dollars ($165,000,000) recurring for each year of the 2025‑2026 fiscal biennium to provide subsidized child care services to a family that includes an individual employed as a qualifying caregiver worker. The Division of Child Development and Early Education shall give priority to child care workers in award of these subsidies.

SECTION 2.(c)  This section becomes effective July 1, 2025.

EFFECTIVE DATE

SECTION 3.  Except as otherwise provided herein, this act is effective when it becomes law.