I have a new client that I'm trying to determine the taxability of her non-military federal retirement income on a CSA 1099R.

She has an NC state retirement that is Bailey.  She's asserting that she's never paid taxes because federal retiree income is non-taxable in NC.  She's bristling and becoming upset because I'm asking questions to understand her situation that "no one else has ever asked her."

I know I can exclude under Bailey, if applicable.  I have left a message so I can request service dates. Is there another provision that excludes it for NC if Bailey doesn't apply? I want to verify it for myself as it may change other clients due to my lack of knowledge.