If you are seeing a change in your state tax return after entering information from your Form 1099-R, be sure to answer all follow-up questions after you have entered the Form 1099-R. Sometimes there are state-related questions there that must be completed in order to get the proper tax treatment on your state return.
Also, pay close attention as you go through your state return. Certain states have specific sections that must be completed during the state tax interview questions in order to determine whether retirement income is taxed or not. This can generally be found in the section of the state returns titled 'Here is some income that State XX Taxes Differently'.
If you still believe that your state return is taxing your 1099-R income incorrectly, please add more details such as what state you are filing and what type of retirement income you have entered.
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