TurboTax is correct and the Iowa pension or any other pension is only taxable to the state you are living in (if there is State income tax).
You only pay state income tax to the state where you live, not the state where you earned or qualified for the pension.
Effective for
retirement income received after December 31, 1995, federal law prohibits any
state from taxing certain retirement income (mainly pension income) unless you
are resident of, or domiciled in, that state.
