Weelllll.......NC does tax the military retirement of recent military retirees....because the vast majority no longer qualify.
In order for a military retirement to be exempt from NC taxes under the Bailey Settlement, the military person must have had 5 years of service before 12 Aug 1989. Someone retiring in 2016 would need to have more than ~30 years of service and only a small % of recent retirees have been in that long
But if yours qualifies, and you are doing 2017 estimates, you could just not include that pension income in the NC estimates for next year.
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
