The only options for a retirement pension benefit deduction in NC are local/federal government vested before August 1989 under the Bailey Settlement or military retiree or SBP payments.
So for your SBP form 1099R you would select the military retiree option to exclude that pay.
If your local government retirement does not meet the Bailey settlement tests then you would select "None of the above" and none of that 1099R would be deductible.
Click here for the instructions for NC form D-400. Extraction below is found on pages 19 and 20.
Line 20. Retirement Benefits Received by Vested N.C. State Government, N.C. Local Government, or Federal Government Retirees, i.e. Bailey Settlement. The exclusion applies to retirement benefits received from certain defined benefit plans, such as the North Carolina Teachers’ and State Employees’ Retirement System, the North Carolina Local Governmental Employees’ Retirement System, the North Carolina Consolidated Judicial Retirement System, the Federal Employees’ Retirement System, or the United States Civil Service Retirement System, if the retiree had five or more years of creditable service as of August 12, 1989.
The exclusion also applies to retirement benefits received from the state’s §401(k) and §457 plans if the retiree had contributed or contracted to contribute to the plan prior to August 12, 1989. The exclusion does not apply to local government §457 plans or to §403(b) annuity plans.
Line 21. Certain Retirement Benefits Received by a Retired Member of the United States Uniformed Services Not Deducted on Line 20. A retired member of the United States Uniformed Services or their eligible beneficiary may deduct the following
• Uniformed Service retirement payments received by a retired member who served at least 20 years in the Uniformed Service or who was medically retired from the Uniformed Service.
• Payments from the Survivor Benefit Plan to a beneficiary of a retired member who served at least 20 years in the Uniformed Services or who was medically retired from the Uniformed Services.
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