It can be e-filed....but if NC has any questions later, they may send you a letter to prove that you, and that particular 1099-R distribution qualifies..

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The procedure is the same in TurboTax every year, so (perhaps) print this out for next year and file it.

IF you were vested in your NC-StateCityCountyMunicipalTeacher or Military/FederalEmployee pension system, 5 years before 12 Aug 1989, you can choose the "Bailey Settlement..." for that particular 1099-R form

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Go back and edit the 1099-R form in the Federal section.

 After you enter your 1099-R form, and "Continue" thru the pages that follow it (Picture 1 below)...until you find the selections for:

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1) "Bailey settlement...."....................<<<<you are selecting this one

2) "Faulkenbury settlement...."

3) "Railroad Ret-SS.........."

4) "None of the above"

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You need to select the "Bailey Settlement..."

Your NC Distribution amount is the same a box 2a of the 1099-R form (or the calculated federally-taxable amount for box 2a, if 2a is empty).

...... that same $$ will be removed from NC Income on the NC D-400, SchS , depending on what selection you made above.  (See picture 2 below)  Note, in that picture, that it adds in with all of the other subtractions from NC income.

NC expects to see those $ subtracted from NC income on their SchS as they match the documents they receive to what you "claimed" on your NC tax filing .

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But note.....Far fewer retired Military/Fed/NCStateMunicipalTeacher employees can exempt their Pension $$ if they retired this year.  BUT...IF you were into your NC-State or Federal/Military pension system, 5 years as of 12 Aug 1989, you can choose the "Bailey Settlement..." and all of that particular 1099-R will be exempted from NC taxation...otherwise you will likely choose "None of the above"

So that 5-years employment  by 12 Aug 1989 is critical

.......if you weren't employed by the NC or Federal Gov't body early enough to meet that deadline...then your Pension distribution is not exempt from NC taxation

Hello, this year I'm not getting the screen to select Bailey Settlement for my federal taxes.  I have been living in PA since 2020 and got the screen last year.  (PA does not tax pension plans)  Any ideas?

Thanks!

@Barry C 

IF you are not filing NC taxes, you don't get the Bailey Settlement selection page...that's only shows up for people filing NC tax returns.  If you haven't been in NC since 2020, most people aren't filing NC....unless they have some rental property or own a business operation remaining in NC.

For PA taxes, when you start thru the PA tax return Q&A, there will be a page similar to the following where you select the Pension type as to whether it is eligible to be exempted from PA taxation.

I can't know which selection you fall under, though.  THer is an I'm Eligible, Plan's Eligible if nothing else fits....but I don't really know PA's rules on selections

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