What this message is trying to say is that you should have entered the fact that this was a code 04E retirement benefit back on the federal return when you entered the 1099-R. Unfortunately, it is not worded well, because the program actually has no idea if you entered it on the federal return or not - it just deletes the state entry that you made so it looks like nothing has happened.
In any case, you want to enter the Louisiana information on the federal return in the 1099-R interview. You won't have to put anything into the state interview.
First, make sure that your state of residence in My Info is Louisiana.
After you enter the 1099-R (Federal->Wages
& Income->Retirement Plans and Social Security, click on "IRA,
401(k), Pension Plan Withdrawals (1099-R)"), you will be asked a series of questions. One is
"Select your state". Indicate "Louisiana".
The next screen will ask, "Where Is
This Distribution From?" You can select "Federal Retirement Benefits (Code 04E)" here and indicate how much of the
distribution is for Louisiana. See the screenshot below.
Finish the 1099-R interview.
When
you get to the Louisiana state interview, you will not have to indicate any
adjustment here, because it was done when the federal data was imported to
Louisiana.
