topic Bailey Exclusion - NC Retiree in Retirement tax questions

Bailey Exclusion - NC Retiree

scsiguru — Thu, 20 Feb 2025 15:52:23 GMT

My wife retired under CSRS and is eligible for the Bailey exclusion here in North Carolina. I'm preparing our NC taxes and I have a question. For the amount of retirement benefits do I use the Gross distribution OR Taxable amount?

Re: Bailey Exclusion - NC Retiree

SteamTrain — Thu, 20 Feb 2025 16:14:22 GMT

@scsiguru

You use the Federally-taxable amount (the box 2a value, or the Federally-taxable amount calculated if box 2a is empty or marked "undetermined).

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Why?:

...........because the NC tax return starts with the Federal AGI......and NC only allows you to deduct what $$ amount was included in the Federal AGI in the first place.

Re: Bailey Exclusion - NC Retiree

scsiguru — Thu, 20 Feb 2025 16:41:26 GMT

Thank you!