You say that this occurred when you tried to e-file? Did you run the state review?
Usually, this kind of error occurs in the review when TurboTax says that something is missing and gives you a picture of the form. You naturally enter the missing item right there, and TurboTax is happy until it's time to e-file.
This is because despite what is implied, you need to go back to the original input screen in the interview and enter it there.
For this situation, you have two places to enter things:
1. Immediately after you enter the 1099-R on the federal return, you will be asked what the source of the pension is. You will check "Qualified government retirement distribution".
2. In the MA interview, for reasons not clear to me, you are asked again about the source of the pension. You will see a screen, "Pensions and Annuities Summary".
- Here you must click the Edit button for this pension.
- You must answer that the pension is excludable on the next screen.
- Then you must indicate the type of Pension ("G - Tax-Exempt").
Did you do all these steps? It is acting like you skipped something, reasonably thinking that you had done enough.
Anyway, walk through the 1099-R portion of the federal interview again and the Pensions and Annuities Summary on the state interview, and see if walking through this with fresh answers will help.
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