For the federal taxes you would pay taxes if you were getting a 1099-R or alimony. Since you are not getting a form 1099-R, entering as alimony would be proper.
For the state question, it appears the best option without a form 1099-R is to enter the amount in the AZ state interview as "Other Subtraction" and in the description state "Military Retirement Pay-Alimony" and put in the amount. In the AZ interview you will find a page titled "Other Subtraction".
Do not attach/send in any supporting documents unless requested.
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