Military retirement pay in North Carolina
Varies
Does North Carolina Tax Military Retirement Pay?
Short answer: No. North Carolina fully exempts military retired pay for retirees with at least 20 years of service or who were medically retired. Retirees who don't meet the 20-year or medical-retirement test don't qualify. SBP, RCSBP and RSFPP survivor annuities can also be deducted. Other retirement income: Pensions and 401(k)/IRA withdrawals are taxed at North Carolina's flat rate with no general retirement exclusion.
Military retired pay is taxable federally; VA disability compensation isn't taxed federally or by any state.
Records to keep: Keep your state return, W-2s and 1099s (1099-R, SSA-1099), and any state credit worksheets. Check your state revenue department's current-year instructions before you file.
Military retirement pay in North Carolina
Varies
Individuals / Personal Taxes
No. North Carolina fully exempts military retired pay for retirees with at least 20 years of service or who were medically retired. Retirees who don't meet the 20-year or medical-retirement test don't qualify. SBP, RCSBP and RSFPP survivor annuities can also be deducted. Other retirement income: Pensions and 401(k)/IRA withdrawals are taxed at North Carolina's flat rate with no general retirement exclusion.
Business justification
No. North Carolina fully exempts military retired pay for retirees with at least 20 years of service or who were medically retired. Retirees who don't meet the 20-year or medical-retirement test don't qualify. SBP, RCSBP and RSFPP survivor annuities can also be deducted. Other retirement income: Pensions and 401(k)/IRA withdrawals are taxed at North Carolina's flat rate with no general retirement exclusion. Military retired pay is taxable federally; VA disability compensation isn't taxed federally or by any state.
Category
- Personal Tax Deductions