NC S246

Modifies the definition of "retirement plan" in North Carolina tax code to include individual retirement plans as defined in the Internal Revenue Code and plans treated as individual retirement plans.

Creates a phase-in deduction for government retirement benefits beginning in 2013, allowing taxpayers vested in state, local, or federal government retirement plans before specified dates to deduct the full amount of benefits received, with the deduction becoming available to earlier-vested employees in successive years through 2021.

Allows a full deduction for retirement benefits received from North Carolina state and local government retirement plans and federal government retirement plans starting in 2022.

Permits deduction of up to $4,000 annually from out-of-state government retirement plans (or the equivalent amount that would be tax-exempt in the other state, whichever is greater), with the limit applying separately to each spouse on joint returns.

Repeals the phase-in provisions effective January 1, 2022, replacing them with the permanent deduction structure for government retirement benefits.