Does Turbo Tax account for the Military Retired Pay subtraction from State Income Tax correctly?

Yes, but how you find it varies by state. What state are you filing?

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Maryland

Yes, it does. Make sure the retirement income is correctly reported when preparing the IRS form 1099-R.

Maryland state income tax return will generate the benefit.

More information about the Maryland Military Retired Pay Subtraction may be found here.

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Do you have an Intuit account?