If the funds were eligible for rollover, and you completed the rollover properly, they were not taxable income on your federal or state return, and so there would have been no need to claim an exclusion.
If the workplace retirement account was a type of account that was not eligible for rollover, then you made a $20K withdrawal that would have been fully taxable on your federal and state tax returns. Maryland allows an exclusion of up to $34,300 of pension income (less social security) from your taxable income, but the withdrawal would be fully taxable on your federal return. Then, putting the money into an IRA would have been a contribution, not a rollover, and would have been an excess contribution since it was more than $7500 (and may have been more than your compensation from working).
So, it's unclear how you could have a rollover AND a state pension exclusion at the same time.
We need to know more about the 1099-R you got from the retirement plan, what kind of plan it is, and whether it is a qualified or non-qualified plan.
