topic My retirement income that I documented covered under the Bailey Act did not transfer as covered to my NC return. I had to pull up the state tax form & change it. in Retirement tax questions

My retirement income that I documented covered under the Bailey Act did not transfer as covered to my NC return. I had to pull up the state tax form & change it.

Lippard1 — Wed, 18 Feb 2026 00:42:49 GMT

The Bailey Act exempts income from state taxes in NC. I’ve never had this error before using TurboTax.

Re: My retirement income that I documented covered under the Bailey Act did not transfer as cover...

CatinaT1 — Wed, 18 Feb 2026 13:44:06 GMT

In the Federal Interview when you entered your 1099-R there should have been a screen that said:

Where is your distribution from?

Select the source of this distribution and enter any other North Carolina information.

With the options to select:

Bailey settlement retirement benefits
Railroad Retirement or Social Security Benefits
United States Armed Forces retirement benefits
None of the above

It's possible you missed that screen but I'm glad you were able to adjust it on the form.

Re: My retirement income that I documented covered under the Bailey Act did not transfer as covered to my NC return. I had to pull up the state tax form & change it.

SteamTrain — Wed, 18 Feb 2026 14:23:39 GMT

@Lippard1 @CatinaT1

I had that happen too.

IT turns out that you have to at least enter "NC" in the state part of box 15. Other wise, the "B" selection doesn't take hold, even if you've properly selected the Bailey Settlement in the interview, right after the main 1099-R form entry.

Remember that for next year (or write a note in your tax folder), in case they don't change the software's behavior next year..

Re: My retirement income that I documented covered under the Bailey Act did not transfer as covered to my NC return. I had to pull up the state tax form & change it.

mpludw13 — Wed, 04 Mar 2026 13:57:41 GMT

Thank you! Adding NC worked!