The MD pension exclusion for military retirement is automatically completed when you enter the form 1099R in the federal interview.
After entering the form information you will be asked in a follow on question "Where is the distributiion from?" You should select "Active or reserve millitary retirement."
Next you will be asked "What kind of retirement plan?" You should select "Non-qualified" for the military retirement pay.
These answers will trigger the MD state return to make the qualified exclusion from MD income. In the MD interview you can "Edit" the "Income" section and you should see the MD pension exclusion topic at the top of the next screen. You can "Edit" that topic to see the exclusion.