NC H103

Adds a new definition of "retirement plan" to North Carolina tax code to include written plans established by employers or self-employed individuals providing payments to employees or beneficiaries after employment ends, plus individual retirement accounts defined under federal tax code.

Creates a phase-in deduction for government retirement benefits starting in 2017 for retirees vested before August 1992, gradually expanding eligibility through 2025 for those vested before August 2017, allowing deduction of amounts received from state, local, or federal government retirement plans.

Provides full deduction of amounts received from North Carolina state and local government retirement plans and federal government retirement plans for taxable years beginning January 1, 2026 and beyond.

Allows deduction of amounts received from other states' government retirement plans to the extent that state would not tax equivalent benefits from North Carolina government retirement plans, effective January 1, 2026.

The phase-in deduction (Section 2) expires January 1, 2026, and is replaced by the permanent full deductions (Section 3) for all government retirees.