Retirement tax questions

Most of this is really not true. I am retired military and entered service on Oct 1987, but n.c. still does not tax my income every month. I voluntarily with hold some of it to offset other income I get state taxed on. Dont know why because it looks like I dont fall under the bailey act. But when i file taxes and the end of the year. I claim i do because the state never officially taxed any of my monthly pay all year long.