My wife took a disability retirement June 2016 and received 1099r, when is it taxable

[dave712]

I'm unclear on how to enter answer the questions since this is the first full year of disability from the Alabama Board of Education.  It's not SSI

[CarolynM · Accepted solution]

In 2017, it is taxable to federal, but not the state of Alabama.

If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer, source IRS on Disability

However, the income is exempt by AL, source  AL Exempt Income