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levylouis
New Member

Should my goverment pension of 60367 be exempt of nc taxes under the baily settlement. It does not appear to have entered in the nc tax form. where's the error?

 
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Accepted Solutions
SteamTrain
Level 15

Should my goverment pension of 60367 be exempt of nc taxes under the baily settlement. It does not appear to have entered in the nc tax form. where's the error?

Only a Maybe....were you 5-year vested in the Govt Pension before 12 Aug or 1989....meaning you had 5 years of credited work with them before that date?  if so:

_______________________________

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

IF you were vested in your NC-StateCityCountyMunicipalTeacher or Military/FederalEmployee pension system, 5 years before 12 Aug 1989, you can choose the "Bailey Settlement..." for that particular 1099-R form

____________________________________________________

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 (Picture 1 below)...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 same $$ will be removed from NC Income on the NC D-400, SchS , depending on what selection you made above.  (See picture 2 below)  Note, in that picture, that it adds in with all of the other subtractions from NC income.

 

NC expects to see those $ subtracted from NC income on their SchS as they match the documents they receive to what you "claimed" on your NC tax filing .

________________________________

But note.....Far fewer retired Military/Fed/NCStateMunicipalTeacher 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 with that public pension source, by 12 Aug 1989 is critical

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

_________________________________
 
1099R_NorCar_2014.png
____________*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

1 Reply
SteamTrain
Level 15

Should my goverment pension of 60367 be exempt of nc taxes under the baily settlement. It does not appear to have entered in the nc tax form. where's the error?

Only a Maybe....were you 5-year vested in the Govt Pension before 12 Aug or 1989....meaning you had 5 years of credited work with them before that date?  if so:

_______________________________

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

IF you were vested in your NC-StateCityCountyMunicipalTeacher or Military/FederalEmployee pension system, 5 years before 12 Aug 1989, you can choose the "Bailey Settlement..." for that particular 1099-R form

____________________________________________________

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 (Picture 1 below)...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 same $$ will be removed from NC Income on the NC D-400, SchS , depending on what selection you made above.  (See picture 2 below)  Note, in that picture, that it adds in with all of the other subtractions from NC income.

 

NC expects to see those $ subtracted from NC income on their SchS as they match the documents they receive to what you "claimed" on your NC tax filing .

________________________________

But note.....Far fewer retired Military/Fed/NCStateMunicipalTeacher 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 with that public pension source, by 12 Aug 1989 is critical

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

_________________________________
 
1099R_NorCar_2014.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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