Bailey Settlement on the Retirement Benefits Deduction Worksheet

Forum|Forum|2 years ago
February 22, 2024
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Bailey Settlement on the Retirement Benefits Deduction Worksheet appear to be correct but the program keeps flagging the Taxpayer number. Where is the error?

The program reports the total allowed and the total of the two numbers in the Taxpayer and Spouse seem to match the allowed.

Best answer by SteamTrain

Another thing I can think of is that the 1099-R forms are assigned to the wrong spouse on the original 1099-R forms......The taxpayer is the first person listed on the Personal Information page.....that may or may not be yourself.

Then the table at top, on the worksheet you are referring to, right next to the Payers Name...the column has a T or an S, for Taxpayer or spouse. Then the $$ from that line that are a "T" or "S" and also marked "B" must go into the appropriate Taxpayer, or spouse column down in line 4. Make sure the $$ are in the correct column at line 4.

Make sure the $$ are not pink/red and "Marked as Estimated"

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Something else too. If the Taxpayer $$ are from a Military pension, that has historically been eligible for the Bailey Settlement exemption.....DO Not double claim it as a Military pension during the NC interview. It's either one, or the other (NC DOR has not said whether former Bailey-eligible Military pensions are supposed to switch over or not)

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OR....delete any of your 1099-R forms, and re-enter them carefully thru the interview.

I haven't seen such Bailey errors in my test files, but I'll go thru them again late tody to see if soemthing crops up.

SteamTrain

@jimb6451

For the taxpayer, does the Federally Taxable number at the top (and coded "B" ) match the taxpayer amount in the section below it on line 4 of the worksheet? Also make sure the Confirmation box is X'ed.

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____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

jimb6451Author

Thanks for your help. There are three entries under Federally Taxable coded "B". Two for me and one for my spouse. In line 4 below, the number for me, a total of the two for me, and one for my spouse all match from above. THe total in the line 4 matches from Taxpayer and spouse and from the total from above ($86,523)

SteamTrain

@jimb6451

Well, unless you missed X'ing the checkbox for line 4, I'm not sure what the problem is.

Could be a rounding error of some kind.

On your original 1099-R forms, edit them, and try dropping the state distribution amount a tiny bit on the page where you made the Bailey Settlement selection...... by dropping the cents (called truncating) such that only even $$ amounts are reported. State shouldn't complain too much if you happened to not claim a $1 or$2 less as being exempt from state taxation.

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Just make sure your pension $$ are truly Bailey Settlement eligible:

Bailey Decision Concerning Federal, State and Local Retirement Benefits | NCDOR

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*