Is the IRA box (next to box 7) checked on your 1099-R? I doubt that this is a distribution from an IRA.
If indeed, you are getting the qualified or not screen, as noted on the screen, military retirement is generally not qualified...and yes, if make a huge difference in the number of questions you'll see.
And Arizona probably thinks that only a 1099-R from a plan is excluded, not an IRA.
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