The $$ withheld should just go into the total state $$ paid in...and if you have too much other income, it will be used to offset any other taxes you owe. (But it's true, I haven't tested that situation yet...I'll go check now after i post this)
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If using the Desktop software, and on the Federal follow-up page where you make the Bailey Settlement selection, make sure the NC state distribution amount is set to the $$$ in box 2a, if box 2a has a real non-zero value in it, (or the box 1 value if all of the distribution is federally taxable).
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
