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nc state taxes

Since I don't pay nc state taxes on nc teacher retirement pension, how is that entered on state tax forms

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Expert Alumni

nc state taxes

When you are working on your North Carolina return be sure to answer Yes to the question: Did you receive any Bailey Settlement Retirement on a W-2? and follow the prompts in this section of the program.  



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Level 15

nc state taxes

@MacWood    You really didn't specify how your NC retirement $$ were being reported to you at year's  end .  Were they on a W-2? or on a 1099-R form?


We need to be a bit more clear here on some subtle differences to the answer @SusanY1  provided. Those directions are  only used if your Bailey retirement income was issued on an actual W-2 form, which apparently isn't all that common, but does occur.


IF your NC Teacher's retirement income  tax form is shown on a 1099-R form, then the Bailey selection is dealt with in the Federal taxes area of your software interview, when you enter that 1099-R form....on a followup page after your main 1099-R entries, you will make the Bailey selection (picture below)


1)  For the NC Distribution Amount, you would enter the value of box 2a of that particular 1099-R form.   

2)  IF box 2a is empty or 'unknown", then it would be the Federally-taxable portion of box 1, once that value has been calculated.


NC starts with the Federal AGI as the starting point for it's tax returns.....that Federal AGI includes the box 2a value (or the federally taxable amount of box 1 in that starting AGI ).  Once you click on the "Bailey Settlement" button on the followup page (after you enter the main 1099-R  form in the Federal section of the software)...once you click on that Bailey Settlement button,   the "North Carolina  Distribution Amount" entered becomes the $$ value it will deduct from the Federal AGI to create a new that value is critical to be entered.




*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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