turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
turbotax icon
turbotax icon
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

North Carolina Military Retirement exemption

I need to deduct my military retirement when computing my North Carolina taxes as meet the requirement of being exempt. I couldn't find any way to do this on the program.
Connect with an expert
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Best answer

Accepted Solutions

North Carolina Military Retirement exemption

As long as you had 5 years of service credited before 12 Aug of 1989...then you would qualify for the "Bailey Settlement" .

The procedure is the same in TurboTax every year, so (perhaps) print this out for next year and file it.

____________________________________________________

Go back and edit the 1099-R form in the Federal section.

 After you enter your 1099-R form, and "Continue" thru the pages that follow it...until you find the selections for:

1) "Bailey settlement...."....................<<<<you are selecting this one

2) "Faulkenbury settlement...."

3) "Railroad Ret-SS.........."

4) "None of the above"

You need to select the "Bailey Settlement..."

Your NC Distribution amount is the same a box 2a of the 1099-R form (or the calculated federally-taxable amount for box 2a, if 2a is empty)....... that $$ will be removed in the NC section depending on what selection you made above.

(Picture Below)

.....Far fewer retired Military/Fed/State employees can exempt their Pension $$ if they retired this year.  BUT...IF you were into your NC-State or Federal/Military pension system, 5 years as of 12 Aug 1989, you can choose the "Bailey Settlement..." and all of that particular 1099-R will be exempted from NC taxation...otherwise you will likely choose "None of the above"

So that 5-years employment by the Feds/Military, or NC-State Gov't-related plan, by 12 Aug 1989 is critical

.......if you weren't employed by the Gov't early enough to meet that deadline...then your Pension distribution is not exempt from NC taxation


____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

View solution in original post

3 Replies

North Carolina Military Retirement exemption

As long as you had 5 years of service credited before 12 Aug of 1989...then you would qualify for the "Bailey Settlement" .

The procedure is the same in TurboTax every year, so (perhaps) print this out for next year and file it.

____________________________________________________

Go back and edit the 1099-R form in the Federal section.

 After you enter your 1099-R form, and "Continue" thru the pages that follow it...until you find the selections for:

1) "Bailey settlement...."....................<<<<you are selecting this one

2) "Faulkenbury settlement...."

3) "Railroad Ret-SS.........."

4) "None of the above"

You need to select the "Bailey Settlement..."

Your NC Distribution amount is the same a box 2a of the 1099-R form (or the calculated federally-taxable amount for box 2a, if 2a is empty)....... that $$ will be removed in the NC section depending on what selection you made above.

(Picture Below)

.....Far fewer retired Military/Fed/State employees can exempt their Pension $$ if they retired this year.  BUT...IF you were into your NC-State or Federal/Military pension system, 5 years as of 12 Aug 1989, you can choose the "Bailey Settlement..." and all of that particular 1099-R will be exempted from NC taxation...otherwise you will likely choose "None of the above"

So that 5-years employment by the Feds/Military, or NC-State Gov't-related plan, by 12 Aug 1989 is critical

.......if you weren't employed by the Gov't early enough to meet that deadline...then your Pension distribution is not exempt from NC taxation


____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

North Carolina Military Retirement exemption

So from what I read on your solution as to whether I can claim Bailey in NC, I retired from USN in 1991 and my pension started in 1991.  Therefor I am not eligible for Bailey.  Is this correct?

North Carolina Military Retirement exemption

@Linda Stanley 

 

Wrong...you are likely eligible...

 

....what was the date, 5years after you Started in the Navy ?   (not when you started receiving your pension)

 

So if you started service in the Navy in say 1971, and stayed in  (no break in service), then you would be 5-years vested in 1976....and that is long before 12 Aug of 1989.

______________________

if you did have a break in service along the way, then it's that date at which you had 5 years of credited service.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
Use your Intuit Account to sign in to TurboTax.
By selecting Sign in, you agree to our Terms and acknowledge our Privacy Statement.
message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question

Related Content

Manage cookies