Yes, OR does not tax federal government retirement for military service prior to Oct 1991. You'll need to verify entries in the federal and OR state interviews.
- In Federal "Wages & Income"
- Edit your military retirement 1099R
- After verifying form entries you will arrive at page asking "Where is your distribution from?"
- Select "Federal Government..."
- Continue
- Next Edit/Continue your OR state interview
- Edit the "Income" section
- "Start/Revisit" the "IRA and Pension..." topic
- There you will be asked to enter your dates of service for the deduction
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