H.B. 46
GENERAL ASSEMBLY OF NORTH CAROLINA
Feb 2, 2023
SESSION 2023 HOUSE PRINCIPAL CLERK
H D
HOUSE BILL DRH40016-NIf-23
Short Title: Eliminate Tax on Gov't Retirees. (Public)
Sponsors: Representative Cleveland.
Referred to:
1 A BILL TO BE ENTITLED
2 AN ACT TO MAKE INCOME RECEIVED FROM A NORTH CAROLINA STATE OR
3 LOCAL GOVERNMENT RETIREMENT PLAN OR A FEDERAL GOVERNMENT
4 RETIREMENT PLAN EXEMPT FROM THE STATE INCOME TAX.
5 The General Assembly of North Carolina enacts:
6 SECTION 1. G.S. 105-153.5(b) reads as rewritten:
7 "(b) Other Deductions. – In calculating North Carolina taxable income, a taxpayer may
8 deduct from the taxpayer's adjusted gross income any of the following items that are included in
9 the taxpayer's adjusted gross income:
10 …
11 (5) The amount received during the taxable year from one or more State, local, or
12 federal government retirement plans to the extent the amount is exempt from
13 tax under this Part pursuant to a court order in settlement of any of the
14 following cases:of the following:
15 a. Bailey v. State, 92 CVS 10221, 94 CVS 6904, 95 CVS 6625, 95 CVS
16 8230.
17 b. Emory v. State, 98 CVS 0738.
18 c. Patton v. State, 95 CVS 04346.
19 a. A North Carolina State government retirement plan.
20 b. A North Carolina local government retirement plan.
21 c. A federal government retirement plan.
22 (5a) (Effective for taxable years beginning on or after January 1, 2021, and
23 before January 1, 2022) The amount received during the taxable year from
24 the United States government for the payments listed in this subdivision.
25 Amounts deducted under this subdivision may not also be deducted under
26 subdivision (5) of this subsection. The payments are:of a Plan defined in 10
27 U.S.C. § 1447 to a beneficiary of a retired member of the Armed Forces of the
28 United States that either (i) served at least 20 years or (ii) medically retired
29 under 10 U.S.C. Chapter 61.
30 a. Retirement pay for service in the Armed Forces of the United States
31 to a retired member that meets either of the following:
32 1. Served at least 20 years.
33 2. Medically retired under 10 U.S.C. Chapter 61. This deduction
34 does not apply to severance pay received by a member due to
35 separation from the member's armed forces.
*DRH40016-NIf-23*
 General Assembly Of North Carolina Session 2023
1 b. Payments of a Plan defined in 10 U.S.C. § 1447 to a beneficiary of a
2 retired member eligible to deduct retirement pay under
3 sub-subdivision a. of this subdivision.
4 …."
5 SECTION 2. This act is effective for taxable years beginning on or after January 1,
6 2024.
Page 2 DRH40016-NIf-23


Statutes affected:
Filed: 105-153.5
Edition 1: 105-153.5