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TaxAct® allows a deduction for Bailey Retirement benefits on the North Carolina return. You must first enter the retirement income on Form 1099-R during the Federal Q&A.

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click the menu icon in the upper left-hand corner, then click Federal.
  2. Click Retirement Plan Income in the Federal Quick Q&A Topics menu to expand the category and then click IRA, 401(k) and Pension Plan Distributions (Form 1099-R)
  3. Click +Add Form 1099-R to create a new copy of the form or click Review to review a form already created 
  4. Click Quick Entry or Step-by-Step Guidance 
    1. If you select Quick Entry be sure to scroll down to answer all applicable questions.
    2. If you select Step-by-Step Guidance, the program will proceed with the interview questions for you to enter or review the appropriate information

Entering the deduction in the North Carolina Q&A:

  1. Click on the State and then click North Carolina under the State menu. On smaller devices, click the menu icon in the upper left-hand corner, then click State.
  2. Click Subtractions
  3. Click Continue until you reach the screen titled North Carolina - Retirement Benefits. Enter the retirement income in the box Vested government retirement benefits (Bailey Settlement) and then click Continue to save the data.

If you instead received retirement benefits reported to you as wages as a vested government retiree (Bailey Settlement), you would navigate through the Miscellaneous Topics.


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