The "Bailey Settlement" exemption does not seem to be reflected in the program. Do I need to show an assumed reduction in future rates to improve results accuracy or am missing something?
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If this wasn't in the North Carolina tax forms as of the end of 2009, then it's not in our code. Relatively few things regarding taxes in the future are present, all of which are federal. We don't have the resources to track state current legislation or case law so until whatever happens is published in the tax forms, what you got in the most recent tax forms is what you get, indexed by inflation appropriately.
Best,
Dick Munroe
It was in the NC tax forms for 2009 ;see deductions from federal income, line 46.
As a result of the North Carolina Supreme Court's decision in Bailey v. State of North Carolina, North Carolina may not tax certain retirement benefits received by retirees (or by beneficiaries of retirees) of the State of North Carolina and its local government or by the United States government retirees (including military). The exclusion applies to retirement benefits received from certain defined benefits plans, such as the North Carolina Teachers' and State Employees' Retirement System, the North Carolina Local Governmental Employees' Retirement System, the North Carolina Consolidated Judicial Retirement System, the Federal Employees' Retirement System, or the United States Civil Service Retirement System, if the retiree had five or more years of creditable service as of August 12, 1989. The exclusion also applies to retirement benefits received from the State's 401 (k) and 457 plans if the retiree had contributed or contracted to contribute to the plan prior to August 12, 1989. The exclusion does not apply to retirement benefits paid to former teachers and state employees of other states and their political subdivisions.
Given the wording, then the answer is no, we don't have it in the code. Basically we don't have enough information to determine if any of the pensions and/or defined benefits accounts meet these criteria so we take the most conservative position and pay taxes on all of it.
Best,
Dick Munroe