I'm trying to efile but my North Carolina return keeps erroring, saying that my Bailey amount must be less than my taxable amount even though it is? what can I do?

There's a question in the federal interview, right after you enter your Form 1099-R, that will ask Where is this distribution from?''.  Make sure to mark it as a Bailey settlement. 

Thank you. I did that and all the entries appear to be correct but it still keeps giving me an error. I suspect some kind of software glitch.

What sort of error are you getting? What does it say and where is it appearing?

It shows up when I try to efile. It takes me to the NC 400S form where the Bailey amounts are listed and says something to the effect that the Bailey amount cannot exceed the total taxable amount. It doesn't but the software doesn't seem to recognize that fact. I have the box checked where it asks to confirm the amount. My wife also has some Bailey but it only errors on mine.

Please check out this answer from SteamTrain that seems to apply directly to your situation.