Removes the individual income rates for taxable years beginning in 2022 through 2025 and beyond, in GS 105-153.7 and instead requires those taxes to be computed at the following percentages of the taxpayer’s income for taxable year 2025 and computed at the specified percentages reduced by .26% for taxable years after 2025. Sets rates based on income and filing status (i.e., married individuals filing jointly, heads of household, unmarried individuals other than surviving spouses and heads of household, and married individuals that do not file a joint return). Applies those amounts to the withholding tables established under GS 105-153.7(b). Expands the other deductions that a taxpayer may deduct from their adjusted gross income under GS 105-153.5 to include income for work performed as either a firefighter, emergency service services personnel, emergency management worker, 911 call center workers, sworn law enforcement officers with the power of arrest, child care workers, public school unit employees, probation or parole officers, and corrections officers. Effective for taxable years beginning on or after January 1, 2025.

Effective July 1, 2025, appropriates $165 million from the General Fund to the Department of Health and Human Services, Division of Child Development and Early Education (Division) in recurring funds for each year of the 2025-26 fiscal biennium to provide subsidized child care services to a family that includes an individual employed as a qualifying caregiver worker (defined). Requires the Division to give priority to child care workers in award of these subsidies.