This seems like a long time bug in TurboTax, in a tax exempt state like NY on Pension over the retirement age, it still taxes the income on the state return. You cannot type EXEMPT in 14 which we have seen on multiple other threads, and if you enter $0 taxable income into the calculation form it removes the federal tax on the income as well as the state tax. I see multiple posts about this over the years and no real solution.
