DanielV01
Expert Alumni

Retirement tax questions

You are correct.  You will need to enter into the Alabama return and hit edit on the 1099-R screen in Alabama.  The next screen will ask if the 1099-R is from a source nontaxable in Alabama.  When you answer yes, the income is excluded.  (You will need to make sure the 1099-R is completely filled out in the Federal section).  Here are screenshots to assist you:  

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