The state tax held out of distribution form ira of 1038.96?

[DanielV01]

What state do you live in?

[chuckbyers]

Oregon

[DanielV01]

Are you wondering why they withheld state tax or what to do?

[chuckbyers]

What to due on state return

[DanielV01]

Oregon fully taxes pension and IRA distributions (with a possible deduction for seniors with certain income restrictions).  

Because of this, entering this in the system will be similar to a W2, only you will do so in the 1099-R section (in the Wages and Income section, it is found in the Retirement portion).  Make sure you enter the withholdings as they appear in box 12 in the appropriate location and answer all of the questions regarding the distribution in the interview.  

All of this should carry over to the Oregon return to determine the correct tax, and whether it contributes somewhat to a refund or if you still owe.