After you enter your 1099-R type, either a 1099-R or a CSA-2099-R in the Federal taxes area, there is a followup page to indicate that it is eligible for the Bailey settlement...and the NC distribution amount is not a zero..if you put in zero, then zero is subtracted from NC income.
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____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*