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Why is my NC retirement income on my 1099-R being state taxed when it is Bailey qualified and I should not be paying state income tax on the retirement amount?

I do not see anything in TurboTax about Bailey eligible income.
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2 Replies
CatinaT1
Expert Alumni

Why is my NC retirement income on my 1099-R being state taxed when it is Bailey qualified and I should not be paying state income tax on the retirement amount?

If you qualify for the Bailey Decision, you will select this in the NC portion of your return. This will make eligible income non-taxable in NC.

 

 

Bailey Decision Concerning Federal, State and Local Retirement Benefits

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Why is my NC retirement income on my 1099-R being state taxed when it is Bailey qualified and I should not be paying state income tax on the retirement amount?

While there is a place in the NC section to indicate it.....the primary place it should be selected is on a follow-up page after the main 1099-R is entered in the Federal section  (Assuming you were still an NC resident when you received those $$)

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1099R_NorCar_2021_OnlineBailey.png

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

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