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This is Okay. On form 1099-R, If a State does not have an Income Tax it may not be listed in the drop down. TX is an example. Other states that may not have an income tax may have other local income related taxes and they would be listed.
If you are on a form other than 1099-R please resubmit.
If you live in a state that does not have income tax, leave box 15 empty.
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