Should Bailey retirement Benefits show up on the NC state portion of my return? It is telling me I have NC tax due and I do not believe this to be correct

It will, but there is one error that NC-eligible people commonly make.

IF it is a regular 1099-R   (not a CSA-1099-R form from OPM)

Where you enter yoru 1099-R form in the Federal area, box 16  (the NC Distribution Amount) must be filled in, even if empty on your 1099-R form. 

The value in box 16 is what gets subtracted from NC income once the Bailey Settlement button is selected.  That NC Distribution amount should be the value in box 2a  (or the Federally-taxable amount of box 1 if box 2a is empty or "undetermined").

So go back to that 1099-R in the Federal section, and edit it to get box 16 filled in:

_____________________________