Enter your DFAS Form 1099-R in the federal tax interview (Retirement Plans and Social Security section of Wages and Income)

The Iowa state tax interview will identify your military retirement income automatically from the DFAS Form 1099-R entry. Complete the state tax interview. There may be additional questions regarding the military retirement pay, but the program will automatically exempt it from your Iowa taxable income.

From Iowa DOR website:

Retirement pay for military service in the United States Armed Forces, the Armed Forces Military Reserve, or the National Guard is eligible for exemption from Iowa income tax and is not included on line 9, without regard for age or disability.   The Army, Navy, Air Force, Marine Corps, and Coast Guard make up the Armed Forces.  Only military retirement pay received from the Defense Finance and Accounting Service (DFAS), or a similar source, is eligible for the exemption.