NC Tax Exemption for Military is not populating.

[victoriahyde2018]

Active Duty Military pay is supposed to be tax exempt in NC, but it is not calculating correctly.

[MaryK4]

Active Duty Military pay for North Carolina residents is not automatically exempt from NC state tax if you are a resident, even if stationed elsewhere. North Carolina only exempts active duty pay if it qualifies as combat zone pay (Box 12 of W-2 with Code Q).

If you are not an NC resident, but are stationed in NC, your military income should not be taxed by NC under the Servicemembers Civil Relief Act (SCRA).

If your issue is with military retirement (not active duty pay), it is exempt in NC only if you had five or more years of service as of Aug. 12, 1989 (the Bailey Settlement). When entering the 1099-R, choose the option "US Armed Forces retirement benefits" and indicate it is a Bailey Settlement, if applicable.

[SteamTrain]

@MaryK4 

all Military retirement pay is now eligible to be deducted, as long as it was for 20 years service, or more..

.....since 2021 Bailey eligibility limitations are longer required.

see:

Military Retirement | NCDOR