North Carolina Military Retired Pay Income Tax Deduction

North Carolina Department of Revenue

Full deduction of military retired pay from North Carolina adjusted gross income

You can deduct your military retired pay from your North Carolina adjusted gross income if you served 20 or more years or were medically retired. Thrift Savings Plan money is treated differently: no state tax is withheld from it, but all TSP distributions are subject to state tax and early withdrawals can be taxed more heavily.

Check eligibility

How to apply

There is nothing to apply for. Claim the deduction on your North Carolina return when you report your federal adjusted gross income.

What you'll need

Your Form 1099-R showing the retired pay, and your DD214 or retirement orders showing your years of service or your medical retirement.

Eligibility

You are a North Carolina resident filing a North Carolina income tax return
You receive military retired pay for 20 or more years of service in the U.S. Armed Forces, or you were medically retired

Source

Official source

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