5 federal tax changes to know in 2026 + when will NC filers get their refunds?
The 2026 tax filing season officially opened Monday, Jan. 26 for North Carolina residents, with the N.C. Department of Revenue beginning to accept individual returns for the 2025 tax year.
This year’s filing comes amid significant changes tied to the federal “One Big Beautiful Bill“ tax law, including expanded deductions for things like tips, overtime and enhanced breaks for certain groups.
The deadline to file your taxes this year is Wednesday, April 15.
Here’s everything you need to know before filing.
2026 federal tax changes
Here are some of the new tax deductions and credits included in the “One Big Beautiful Bill,” according to the IRS:
- No tax on tips and overtime: Workers who receive tips can deduct up to $25,000 of qualified tip income on their federal return. Plus, you can deduct part of your overtime pay (the extra half-time beyond normal hours) — up to $12,500 for individuals or $25,000 for couples filing jointly.
- Car loan interest deduction: Interest paid on certain new U.S.-assembled auto loans may be deductible up to $10,000 a year.
- Extra deductions for seniors: People 65 and older can claim an additional $6,000 deduction (or $12,000 for couples), on top of the standard deduction.
- Expanded charitable deduction: Starting in 2026, even taxpayers who don’t itemize can deduct up to $1,000 ($2,000 for joint filers) in cash donations.
- Higher standard deduction and other credit increases: Standard deduction amounts are raised for inflation, and credits like the Child Tax Credit are increased under the law’s changes.
NC tax refunds
Most tax refunds arrive in under 21 days after the IRS approves your return. If you file electronically, you can start tracking your refund within 24 hours using the IRS2Go app or the “Where’s My Refund?” tool.
The fastest way to get your money is to file online and choose direct deposit, which lets the IRS send your refund straight to your bank account.
Delays can happen if a return is mailed, contains errors, is flagged for fraud or needs extra review. In those cases, the IRS will reach out by mail if more information is needed.
Free tax filing NC
The IRS’ Direct File system will not be available this year, the Observer previously reported, meaning taxpayers will not be able to file their taxes directly with the agency.
However, there are some free tax filing services you can use to prepare and file your return, many through the IRS Free File program. These programs are usually available for taxpayers under a certain adjusted gross income (AGI):
- Tax Act: Free federal filing for those with AGI under $84,000 and age 20-59. State returns are $39.99.
- FreeTaxUSA: Provides free federal filing for all users. State returns are $15.99.
- TaxSlayer: Free federal filing if AGI is under $48,000, possibly higher under certain criteria. State returns at $39.99.
- 1040NOW.net: Free federal filing for taxpayers with AGI under $76,000 and additional eligibility rules, such as residency or military status. State returns are $24.95.
- FileYourTaxes.com: Free federal filing for AGI between $8,500 and $84,000 plus age or military requirements. State returns are $50.
- ezTaxReturn.com: Has a free file cap of up to $84,000 with age, residency and other conditions. State returns range from $24.99-$39.99.
How to avoid penalties while filing
Here are some ways you can avoid penalties from filing your taxes, according to the IRS:
- File your return on time: Filing by the deadline (or filing an extension) helps you avoid the expensive failure-to-file penalty.
- Pay what you owe by the due date: Even if you can’t pay in full, paying on time, or setting up a payment plan, helps reduce failure-to-pay penalties and interest.
- Make estimated tax payments if needed: If you have income without withholding, pay quarterly estimated taxes to avoid underpayment penalties.
- Check and adjust your withholding: Using tools like the IRS Tax Withholding Estimator or updating your W-4 with your employer can help make sure enough tax is withheld during the year.
- Keep accurate records: Good documentation for income, deductions and credits can help prevent errors that trigger penalties.
- Request an extension, if you need one: Filing Form 4868 by the due date gives more time to file, but you still must pay what you owe by Tax Day.
- Consider penalty relief if there’s a valid reason: The IRS offers options like first-time abatement or reasonable cause relief if circumstances beyond your control prevented you from making timely payments.
This story was originally published February 2, 2026 at 7:00 AM with the headline "5 federal tax changes to know in 2026 + when will NC filers get their refunds?."
