Military Retirement Session Law 2021-180 created a new North Carolina deduction for certain military retirement payments. Effective for taxable years beginning on or after January 1, 2021, a taxpayer may deduct the amount received during the taxable year from the United States government for the following payments: Retirement pay for service in the Armed Forces of the United States to a retired member that meets either of the following: Served at least 20 years. Medically retired under 10 U.S.C. Chapter 61. This deduction does not apply to severance pay received by a member due to separation from the member's armed forces. Payments of a Plan defined in 10 U.S.C. § 1447 to a beneficiary of a retired member eligible to deduct retirement pay under sub-subdivision a. of this subdivision. The deduction is only allowed to the extent the payments are included in the taxpayer's adjusted gross income. Note: Amounts deducted under G.S. 153.5(b)(5a) may not also be deducted under G.S. 153.5(b)(5). The Department will issue additional guidance about this deduction in 2022. Related Content Armed Forces Information
Military Retirement Session Law 2021-180 created a new North Carolina deduction for certain military retirement payments. Effective for taxable years beginning on or after January 1, 2021, a taxpayer may deduct the amount received during the taxable year from the United States government for the following payments: Retirement pay for service in the Armed Forces of the United States to a retired member that meets either of the following: Served at least 20 years. Medically retired under 10 U.S.C. Chapter 61. This deduction does not apply to severance pay received by a member due to separation from the member's armed forces. Payments of a Plan defined in 10 U.S.C. § 1447 to a beneficiary of a retired member eligible to deduct retirement pay under sub-subdivision a. of this subdivision. The deduction is only allowed to the extent the payments are included in the taxpayer's adjusted gross income. Note: Amounts deducted under G.S. 153.5(b)(5a) may not also be deducted under G.S. 153.5(b)(5). The Department will issue additional guidance about this deduction in 2022. Related Content Armed Forces Information
