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1 Best answerMore info. it depends:
Be careful. many currently retiring NC-State/Federal/Military people find out they are not eligible for the NC-exemption of those pension $$. A person retiring in 2015 found they would need more than ~30 years of service before they could get that exemption.
As long as you had 5 years of service credited before 12 Aug of 1989. then you would qualify for the "Bailey Settlement" .
The procedure is the same in TurboTax every year, so (perhaps) print this out for next year and file it.
IF ..you still qualify
Go back and edit the 1099-R form in the Federal section.
After you enter your 1099-R form, and "Continue" thru the pages that follow it. until you find the selections for:
2) "Faulkenbury settlement. "
3) "Railroad Ret-SS. "
4) "None of the above"
You need to select the "Bailey Settlement. "
Your NC Distribution Amount is the same a box 2a of the 1099-R form (or the calculated federally-taxable amount from box 1, if 2a is empty). that same $$ will be removed in the NC section depending on what selection you made above.
. 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/service 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
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
