A BILL TO BE ENTITLED
AN ACT to provide equal income tax treatment of government retirees' benefits.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 105‑134.1(13) reads as rewritten:
"(13)	Retirement  plan. – A written retirement plan established by the employer to provide payments to an employee or the beneficiary of an employee after the end of the employee's employment with the employer where the right to receive the payments is based upon the employment relationship. With respect to a self‑employed individual or the beneficiary of a self‑employed individual, the term means a written retirement plan established by the individual to provide payments to the individual or the beneficiary of the individual after the end of the self‑employment. In addition, the term includes  an individual retirement plan as defined in the Code and any plan treated as an individual retirement plan under the Code. For the purpose of this subdivision, the term "employee" includes a volunteer worker."
SECTION 2.  G.S. 105‑134.6(b) is amended by adding a new subdivision to read:
"(b)	Deductions. – The following deductions from taxable income shall be made in calculating North Carolina taxable income, to the extent each item is included in taxable income:
…
(5c)	The amount received during the taxable year from one or more State, local, or federal government retirement plans, subject to the phase‑in provided in this subdivision:
Taxpayer Vested in the Plan
on or before:	Income Years Beginning
August 1992	In 2011
August 1995	In 2012
August 1998	In 2013
August 2001	In 2014
August 2004	In 2015
August 2007	In 2016
August 2010	In 2017
August 2013	In 2018
August 2016	In 2019".
SECTION 3.  G.S. 105‑134.6(b) reads as rewritten:
"(b)	Deductions. – The following deductions from taxable income shall be made in calculating North Carolina taxable income, to the extent each item is included in taxable income:
…
(6)				The amount received during the taxable year from one or more retirement plans other than state, local, or federal government retirement plans, not to exceed a total of two thousand dollars ($2,000) in any taxable 	year. In the case of a married couple filing a joint return, if both spouses received retirement benefits during the taxable year, the maximum dollar amount applies separately to each spouse's benefits.
(6a)	The amount received during the taxable year under North Carolina State and local government retirement plans and under federal government retirement plans.
(6b)	The greater of the following:
a.	The amount received during the taxable year under a state or local government retirement plan of a state other than North Carolina, to the extent that other state would not subject to individual income tax the equivalent amount received under a North Carolina State or local government retirement plan.
b.	Up to four thousand dollars ($4,000) received during the taxable year under a state or local government retirement plan of a state other than North Carolina. In the case of a married couple filing a joint return, if both spouses received benefits from a retirement plan during the taxable year, the maximum dollar amount applies separately to each spouse's benefits."
SECTION 4.  Section 2 of this act is effective for taxable years beginning on or after January 1, 2011. Section 2 of this act is repealed for taxable years beginning on or after January 1, 2020, and Section 3 of this act is effective for taxable years beginning on or after January 1, 2020. The remainder of this act is effective when it becomes law.