Lump Sum Distributions

You received a lump-sum distribution if you received payment of the entire balance from your employer's qualified pension plan, qualified stock bonus plan, or qualified profit sharing plan within a single tax year.

If your federal adjusted gross income includes your lump-sum distribution you do not need to adjust your North Carolina return.

But, if you computed your federal tax separately on this income you must make an adjustment on your North Carolina return. This is necessary because your distribution amount is not included in your federal adjusted gross income which is used as the starting point for your North Carolina return for tax years beginning on or after January 1, 2012.

To make this adjustment, enter the total taxable amount of your lump sum distribution on line 38 of Form D-400. This amount will become part of the amount on line 7 of page 1 of your Form D-400.