State tax filing

The way it has worked in past years (haven't checked this year), is that the full distribution amount is brought along as a NY distribution. 

Then you get to make a selection of one of the NY retirement plans which is not taxed by NY (See below).

Then, the software knows to deduct the "NY Distribution" from the Federal income value, to arrive at a modified NY income amount.   IF you force re-set the NY distribution amount to zero, and the NY exempt-pension type has been selected, then the software subtracts zero from the Federal income....so don't do that.