I am trying to input a 1099-R for military retirement and it shows up in Turbo Tax as a penalty for removing money from a pension account.

[mr_elliott]

I have heard if you are a disabled veteran you do not have to file the 1099-R. Is that true?

[Patrice]

No, it is not true that you don't have to file your 1099-R if you are disabled.  The IRS requires that 1099-R distributions be reported however you may be exempt from the penalty due to disability.  A disability exemption applies to the total and permanent disability of the plan owner. See IRS Retirement Topics - Exceptions to Tax on Early Distributions.