I agree, however: in turbotax, I have to complete the Retirement Benefits Worksheet (it is a worksheet I keep for my records, but it affects my NC taxable income) on which I list my spouse's and my retirement benefits (pension, IRAs, etc.). The only types of retirement benefits I can exclude from NC income on that worksheet are those defined by in the Bailey Settlement. Basically, for my spouse and me, that is SS and Federal retirement benefits. All else affects the ratio of NC-related income to total income, and hence the NC taxable income. I talked with Turbotax and they told me that I should override the excludible lines and put in that which is not NC related retirement income. That is fine with me, and I hope it is fine with NC department of revenue. I am just wondering whether NC thinks it can tax my Fidelity IRA distribution that is not in any way related to NC.
