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North Carolina Total Taxable Pension under Part-Year Resident Income Allocation for military retirement and 401k cash-out

Forum|Forum|3 years ago
March 19, 2023
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On the first screen for Part-Year Resident Income Allocations, it shows the "Total Taxable Pension" amount from my Federal Return. My amount includes my military retirement and the 401k that I cashed out right after I moved to North Carolina. Since the next screen asks about my military retirement benefits, do I adjust the first screen's "Total Taxable Pension" by removing the military pay amount so it just reflects my 401k amount?

Total $55,124 / Military Total $27,416 (NE - $11,341 + NC - $16,075) / 401k Total $27,708 (all NC)

Here are the two options I can't decide between:

1. Total $55,124 / NC $43,783 / Non-Res NC $0 - Total minus the military retirement I made while living in Nebraska ($11,341)

2. Total $55,124 / NC $27,708 / Non-Res NC $0 - Total minus all military retirement ($27,416, since it's addressed on the next screen) and this just reflects my 401k cash-out.

Thanks for your help!

Best answer by lwpowelljr

Looking over the Form View for the Part-Yr/NR Wks for North Carolina and seeing how it calculates the Federal (first column on the worksheet) and the NC Source Income (second column on the worksheet), I believe the first option would be the correct option. I just need a tax-savvy person to confirm this:

First screen (Part-Year Resident Income Allocations)

Total Taxable Pension $55,124 / NC Resident Income $43,783 (minus the $11,341 military amount I made while living in NE) / NC Income while Non-Res $0

Second screen (Part-Year Resident Income Allocations)

Retirement Benefits Received...(Military) $27,416 / NC Resident Adjustment $16,075 (the amount I made while living in NC) / NC Adjustments while Non-Res $0

Thank you for any confirmation!

L

lwpowelljrAuthorAnswer

Looking over the Form View for the Part-Yr/NR Wks for North Carolina and seeing how it calculates the Federal (first column on the worksheet) and the NC Source Income (second column on the worksheet), I believe the first option would be the correct option. I just need a tax-savvy person to confirm this:

First screen (Part-Year Resident Income Allocations)

Total Taxable Pension $55,124 / NC Resident Income $43,783 (minus the $11,341 military amount I made while living in NE) / NC Income while Non-Res $0

Second screen (Part-Year Resident Income Allocations)

Retirement Benefits Received...(Military) $27,416 / NC Resident Adjustment $16,075 (the amount I made while living in NC) / NC Adjustments while Non-Res $0

Thank you for any confirmation!

A

AnnetteB6

These part-year resident allocations can be tricky. Since the military retirement was addressed on its own in the following screen, your interpretation of what is being asked seems correct.

The total starts with the amount reported on your Federal return. Then the NC amount is adjusted by amounts received before you became a resident of NC.

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