I am sorry that we are having trouble communicating.
I will note that the Mississippi State Statutes, Title 35, Part 3, Subpart 2, Chapter 07 states the following:
"100 Amounts received as retirement allowances, pensions, annuities or optional retirement allowances from any Federal, State, and Private retirement system or plan are exempt from State Income Tax."
and
"104 Early distributions from retirement plans do not qualify for this exemption. Although these amounts are subject to state income tax (emphasis mine), there is no early withdrawal penalty for state purposes."
From the context, the only thing that the word "exemption" in paragraph 104 can refer to is "exempt" in paragraph 100; that is, even pensions from state retirement plans are not exempt from State Income Tax if they are early distributions. There is no other way to interpret the plain language of the tax code.
The state statutes can be found here.
It is for that reason that neither TurboTax 2018, 2019, 2020 asks about the source of the pension. If the pension distribution is not an early distribution, then it is taxable in Mississippi, no matter what its source. That's what the law says. And, as you can imagine, if the pension were not an early distribution, it still would not be taxed, because no pension is taxed, whether or not it comes from a state government.
In other states, the source of the pension can determine whether or not the pension is taxable in the state. But since the source of the pension makes no difference in Mississippi, TurboTax does not ask the source - and has not done so for at least the last three years.
I will repeat that based on the distribution code(s) that you entered on the two 1099-Rs, the pension distributions were described by the plan administrator as "early" and therefore subject to Mississippi tax.
However, if you change the distribution code(s) to "7" (normal), TurboTax will not tax the two distributions. This suggests to me that the problem is that your pension administrator used "7" as the distribution code(s) in 2019, but for whatever reason used "2" in 2020, causing this situation.
I would encourage you to check this on your previous 1099-R(s).
Based on what was entered into TurboTax, it is working in accordance with state law.
[Edited 2/5/2021 9:45 pm CST - I removed the word "Florida" and updated a broken link for the state statutes]
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