AN ACT TO LIMIT THE TAX EXEMPTION FOR RETIREMENT PLAN DISTRIBUTIONS ROLLED OVER INTO A QUALIFYING TAX-EXEMPT BAILEY RETIREMENT TO ROLLOVER DISTRIBUTIONS FROM ANOTHER QUALIFYING TAX-EXEMPT BAILEY RETIREMENT ACCOUNT, AS RECOMMENDED BY THE REVENUE LAWS STUDY COMMITTEE.
Identical to S 18, filed 2/3/15.
Under current law, GS 105-153.5 provides that the amount a taxpayer receives during the taxable year from one or more state, local, or federal government retirement plans is exempt from North Carolina income tax to the extent that the amount is exempt from tax under a court order in settlement of one or more of the following cases, collectively referenced as the Bailey case: (1) Bailey v. State, 92 CVS 10221, 94 CVS 6904, 95 CVS 6625, 95 CVS 8230; (2) Emory v. State, 98 CVS 0738; and (3) Patton v. State, 95 CVS 04346. Current law makes this exemption applicable to any income distributed to the retiree from a supplemental retirement income plan. Changes in federal law in 2002 permitted rolling over distributions from non-qualifying retirement accounts into a qualifying Bailey retirement account, resulting in all distributions from a qualifying Bailey account, regardless of the source of the funds, being tax-exempt.
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