The actual change to the tax code in Utah was that taxpayers receiving military retirement income receive a nonrefundable tax credit of 4.95% of the distribution reported in income, so the military retirement still appears as taxable income but a credit is applied to compensate for it. See this Utah page.
NOTE: you can't take the military tax credit if you claim either the Social Security Benefits Credit or the Retirement Credit. Please see this Utah page.
TurboTax will identify which of the credits gives you the best result and apply it automatically.
We have identified an issue with the military retirement credit in Utah, and are researching it.
I just completed the Turbotax filing for federal and Utah for 2021 and I can't see that the military retirement income was handled correctly on the TC40 form. How can I check to see if it was done correctly by the Turbotax program?
You are looking for the Military Retirement Credit on your Utah tax return. You would look for the credit on form TC-40A, part 3 with code AJ.