Retired Military filing PY return for VA. My 1099R Retired Pay shows nothing in box 12. Do I put the Gross from box 1 on the 760PY INC?

Do not change your 1099-R  (BOX 12 is State Tax Withholding).

If you were a Part Year resident of VA, you should have a second resident state.  You can allocate the amount of distribution to each state in the software.  Generally it is based on the number of months in each state.