Are you referring to the Michigan law here?
If so, in the Federal 1040 tax return, did you answer this question correctly?

In the Federal 1040 tax return, did you answer this correctly?

In the Michigan state income tax return, did you see the screen Here's the income that Michigan handles differently?
Click Edit to the right to see whether the pension income is excluded from taxable Michigan income.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"