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Old 04-11-2007, 07:39 AM
 
1 posts, read 24,022 times
Reputation: 66
Default NC Income Tax - Federal Retirement



I am a retiree from the Federal Government (30+ years 1974 - 2005). We have recently moved to North Carolina.

I was under the impression that my civil service annuity would not be taxed by the state of NC. Is this true? If it is, how do I fill out the NC Tax form?

If not, how much is taxable?

nc141bd
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Old 04-11-2007, 10:01 AM
 
Location: The 12th State
21,680 posts, read 37,010,844 times
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If any thing I wish was changed in this state is the tax credits and percentage the state receives. I often get a decent refund on federal only for the state to get most of it. But this year I got a 12 dollar refund LOL so I guess I should be happy.

I suggest turbo tax it is very user friendly unlike the actual NC forms that always give me a head ache
Check out for what you are looking for here http://www.dornc.com/taxes/
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Old 04-11-2007, 11:00 AM
 
Location: Blue Ridge Mtns of NC
5,658 posts, read 17,376,149 times
Reputation: 3489
Quote:
Originally Posted by nc141bd View Post


I am a retiree from the Federal Government (30+ years 1974 - 2005). We have recently moved to North Carolina.

I was under the impression that my civil service annuity would not be taxed by the state of NC. Is this true? If it is, how do I fill out the NC Tax form?

If not, how much is taxable?

nc141bd
Smart move. Based on the information you provided , your CSRS income would be exempt from taxation in NC.

As a result of the North Carolina Supreme Court’s decision in Bailey v. State of North Carolina and the settlement subsequently reached in that case, North Carolina may not tax retirement benefits received by a retiree (or by a beneficiary of a retiree) from qualifying State, local, or federal retirement systems if the retiree was vested in the retirement system as of August 12, 1989. For most government retirement systems, a person is vested if the person had five or more years of creditable service in a qualifying State, local or federal retirement system as of August 12, 1989. For certain retirement systems, the vesting period is less.

Bailey Settlement Bulletin - http://www.dornc.com/practitioner/in...06.pdf#page=29

A retiree entitled to exclude retirement benefits in arriving at North Carolina taxable income should claim a deduction on line 42 of the D-400 for the amount of excludable retirement benefits included in federal taxable income. A copy of Form 1099-R or W-2 received from the payer must be attached to the return to support the deduction.

The National Active and Retired Federal Employees Association (NARFE) is also an excellent resource and provides assistance to their members. - http://www.narfe.org

Last edited by mm34b; 04-11-2007 at 11:54 AM..
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Old 04-06-2011, 02:16 PM
 
1 posts, read 14,222 times
Reputation: 10
Federal pensions are exempt from NC state taxes. That is pretty simple.
Quote:
Originally Posted by nc141bd View Post


I am a retiree from the Federal Government (30+ years 1974 - 2005). We have recently moved to North Carolina.

I was under the impression that my civil service annuity would not be taxed by the state of NC. Is this true? If it is, how do I fill out the NC Tax form?

If not, how much is taxable?

nc141bd
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Old 07-18-2013, 10:26 AM
 
1 posts, read 4,213 times
Reputation: 10
The law says " if the retiree was vested in the retirement system as of August 12, 1989." I'll be retiring from the military in 2015. Entered to active duty in 1997 but spend 9 years in the Reserves from 1988 to 1997. Will my pension be taxed or not? Thanks.
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Old 07-18-2013, 11:04 AM
 
Location: Sneads Ferry, NC
6,367 posts, read 5,711,225 times
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Quote:
Originally Posted by WR922 View Post
The law says " if the retiree was vested in the retirement system as of August 12, 1989." I'll be retiring from the military in 2015. Entered to active duty in 1997 but spend 9 years in the Reserves from 1988 to 1997. Will my pension be taxed or not? Thanks.
That's a question for the HR department of your branch of the service. If you get retirement credit for your reserve service, and you were vested in it by August 12, 1989, then you should not be taxed.
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Old 07-18-2013, 02:46 PM
 
2,322 posts, read 1,630,432 times
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Quote:
Originally Posted by WR922 View Post
The law says " if the retiree was vested in the retirement system as of August 12, 1989." I'll be retiring from the military in 2015. Entered to active duty in 1997 but spend 9 years in the Reserves from 1988 to 1997. Will my pension be taxed or not? Thanks.
I think the pension will be taxed but you can follow up with your HR to find out if you were vested prior to 1989. Apparently The law states that is normally for service for 5 years PRIOR to 1989 to retroactively grandfather the old timers. not the future retirees.

Last edited by theoldnorthstate; 07-18-2013 at 02:57 PM..
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Old 07-18-2013, 02:50 PM
 
Location: Fayetteville, NC
1,463 posts, read 2,755,078 times
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Quote:
Originally Posted by WR922 View Post
The law says " if the retiree was vested in the retirement system as of August 12, 1989." I'll be retiring from the military in 2015. Entered to active duty in 1997 but spend 9 years in the Reserves from 1988 to 1997. Will my pension be taxed or not? Thanks.

Yes, your military pension will be subject to NC tax. You have to have 5 years service before that date.

I came in 1 Jun 1984. I have my 5 years vestment prior to Aug 12 1989 by two months. I don't include my pension in my NC income.
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Old 07-18-2013, 03:26 PM
 
Location: Wake Forest CSA
334 posts, read 323,699 times
Reputation: 341
Surely you want to voluntarily pay more tax? There is a fund for that.
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Old 07-19-2013, 08:42 AM
 
Location: Central Massachusetts
1,510 posts, read 854,295 times
Reputation: 1223
Default That is why

This Bradley ruling is one of the reasons that NC is on my list. I have and I am currently still in the military/federal service 8 solid years prior to 1989 and my pensions are both based on time that began in 1976. As I am army national guard and a FERS employee I will draw two pensions based on civil service in both.
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