Financial Benefits for Veterans in North Carolina
1 Financial benefit for veterans in North Carolina.
Not affiliated with the U.S. Department of Veterans Affairs or any state agency. Verify all benefits with the official source.
Financial
Military Retirement Pay State Income Tax Deduction
North Carolina allows a full deduction of military retirement pay and Survivor Benefit Plan payments from state income tax for tax years beginning 2021, effectively exempting eligible military retirement income.
Eligibility: Retired members of the U.S. Armed Forces who served at least 20 years or were medically retired under 10 U.S.C. Chapter 61, and beneficiaries receiving Survivor Benefit Plan payments.
Estimated value: Full state income tax deduction on qualifying military retirement pay
How to apply: Claim the deduction on Form D-400 Schedule S when filing your North Carolina income tax return, attaching Form 1099-R.
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Last verified July 16, 2026