Yes, you are correct. NC now excludes military retirement pay from NC taxable income.
First be sure in the "My Info" or "Personal Info" section you have indicated you served in the military and select retired. Then after entering your 1099R information in the "Income" section you will arrive at a page asking "Where is this distribution from?" One of the options is "US Armed Forces retirement benefits." You should select that one if you are not part of the Bailey settlement. The NC distribution amount should be populated from your prior 1099R entry.
You may need to delete the 1099R and re-enter the information manually if you are not seeing the "Armed Forces retirement" option.
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