Was medically retired late 2022 after 20+ years of service (combat related).
-Box 7 on 1099-R has code 3 (disability)
-DOD rated me at 100% and VA rated me at 100%. I know VA is not taxable whatsoever, my issue is on the DFAS side and TT not allowing me to pay state taxes with $0 income.
-I paid $685 in state taxes as I was unsure if california would tax my retirement pension from DFAS as I am CRDP and not yet approved for CRSC.
-Box 1 (along with 2 & 4) is $0.00 for gross distribution.
-When I was first retired I spoke with DFAS and they said that my DOD retirement wasnt federally taxed but they couldnt speak on if california would tax it thats why I kept paying it. I now know that I did not need to.
How to work around this error or is that $685 a loss that I willingly gave to CA? If I put $0 in box 14a it will let me proceed but then I cant claim the $685 for state tax return.
Thank you for your time and if more info is needed please let me know.
