So its still not intuitive, but there is a way to correct this in Turbotax.
The situation I had was wife's retirement 1099-R, its got box 7 lised as 2, which is the "early retirement". As we know, while PERS retirement income is not taxed by the state of MS, it is still subject to Federal taxes in most cases. Turbotax will apply MS taxes upon the initial fillout of this form, which is a little maddening that this issue hasnt been cleaned up and at least when the initial 1099-R is entered, questions asked to get the taxation correct on it.
However, once you enter the MS state tax part of the program, there is a checkbox under the 1099-R section there for "I qualify to exempt this income from Mississippi tax". When I check that box, the amounts clear up, and the info is then applied correctly.
So, there is a fix, but its not intuitive and certainly not the "Walk you through" process that most people use TurboTax for. I hope next year this process is made a little more seamless.
