On your 1099-R from North Carolina, Box 1 shows your gross distribution amount and box 2a shows your taxable amount. If box 2a is blank, then 2b may be checked to indicate that taxable amount not determined. Your retirement plan is a defined benefit plan under section 401(a) of the Internal Revenue Code. This is basically an annuity
From the NC Department of State Treasurer, I copied this information:
Federal Income Tax
Part of your retirement benefit may not be subject to federal income tax because the tax was withheld while you were working. Included in the nontaxable part of your retirement benefits are contributions you made before July 1, 1982, and any non-rollover service purchases you made.
All or part of your retirement benefit may be subject to federal income tax because it was not previously taxed. Included in the taxable part of your retirement benefits are contributions you made after July 1, 1982, any rollover service purchases, and all benefits paid from the employer contributions and investment earnings.
Under federal law, the majority of each retirement benefit is subject to federal income tax. Although you will not pay taxes again on any contributions for which you have already paid tax, you may exclude only a small portion of your previously taxed contributions each month throughout a period of time specified by the federal government.
? North Carolina Income Tax
If you are a North Carolina resident and have maintained 5 or more years of retirement service credit as of August 12, 1989, your TSERS retirement benefit is not subject to North Carolina income tax. If you do not have 5 years of maintained retirement service credit as of August 12, 1989, the taxable portion of your retirement benefit is subject to North Carolina income tax.
So depending on your situation and your 1099 R, some or all of your annuity could be subject to Federal Income Tax, but probably not State tax.
