After entering my 1099-R's it's charging me for NC state income tax even though it would be exempt due to military service for more than 5 years prior to 1989.

[slade1013]

I've left the state tax withheld boxes blank as instructed.

[SteamTrain · Accepted solution]

Well it could be other income too that is causing the problem.

BUT...on the page following the  main 1099-R enter.

1) Select the "Bailey settlement...." 

and

2) The NC distribution amount must be the same as box 2a ...(or the Federally taxable amount of box 1 if box 2a is empty)  The NC distribution is not blank or zero.  The software uses that number to subtract from Federal gross to create NC gross.

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[slade1013]

That was it. I figured it out right after posting my question and going through everything again. Thank you!

[SteamTrain]

Good to hear...
...others may see this Q&A, and the picture sometimes helps to see what they should be looking for.