Any VA disability pay is already excluded from taxable income as it should not be entered on your tax return. Those MD taxpayers under age 55 can get up to 12,500 of their military retired pay excluded and those 55 or older can get up to $20,000 of military retired pay excluded.
To take the MD exclusion for military retirement pay, start in the "My Info" section and ensure you indicate your military affiliation "Former/Retired" military.
Next enter the form 1099R in the "Wages & Income" section. Be sure to indicate on the follow on page that the 1099R is "Active or Reserve Military Retirement" and continue to complete the 1099R section. This automatically excludes the proper 1099R amount from MD taxable income.