North Carolina exempts all taxable social security benefits reported on your federal return. However, it exempts the income by giving you a deduction on Form D-400, Schedule S.
Social security benefits you received that are not included in your federal adjusted gross income will not qualify for the deduction.
Please view this North Carolina link for more information.
Please view this TurboTax FAQ and follow the instructions to allocate income on a Part-year resident return.
