Social Security and Railroad Retirement Benefits

Unless otherwise noted, the following information applies to individuals for tax year 2023. For information about another tax year, please review the Department’s Instructions and Bulletins for that year.

If your social security or railroad retirement benefits were taxed on your federal return, you may take a deduction for those benefits on your North Carolina individual income tax return. You may take this deduction because this income has already been included as part of your federal adjusted gross income and North Carolina does not tax this income. This deduction will increase your refund or decrease the amount you must pay.

Any social security benefits you received that are not included in your federal adjusted gross income cannot be deducted on your North Carolina return. If your federal adjusted gross income includes social security benefits, enter the taxable amount of social security benefits on Form D-400 Schedule S, Part B – Deductions from Federal Adjusted Gross Income, Line 19. The total deductions from federal adjusted gross income entered on Form D-400 Schedule S, Line 41, also needs to be entered on Form D-400, Line 9.

You can only deduct supplemental benefits paid by the railroad under the provisions of the Railroad Retirement Act. If you were an employee of a railroad company and received a distribution from the company's retirement plan, this amount does not qualify for the deduction because it was not paid under the provisions of the Railroad Retirement Act. If your federal adjusted gross income includes Railroad retirement benefits received under the provisions of the Railroad Retirement Act, enter the taxable amount on Form D-400 Schedule S, Part B – Deductions from Federal Adjusted Gross Income, Line 19. The total deductions from federal adjusted gross income entered on Form D-400 Schedule S, Line 41, also needs to be entered on Form D-400, Line 9.