Why is 1099-R Office of Personnel Management death benefit on Massachusetts return coded as "G" (tax exempt) even though I said it should not be excluded?

[mafusi46]

Massachusetts return.
Turbo Tax asks "Is the retirement distribution from the office of Personnel Management Retirement Services Program an excludable distribution for Massachusetts?"
-this is a death benefit, and the 1099-R shows the full amount is taxable.
-I selected the response " No, this distribution should not be excluded or the distribution is a rollover."
-In the summary table, the distribution is coded as G, which indicates that it is non-taxable.
- on the subsequent screen, I am to asked to enter how much of the "Non taxable Massachusetts pension should be excluded".  If I override and enter 0, I will need to file a paper return.   
I think the issue is that TT is coding this distribution as G when it should not be. How can this be fixed?  thaks

How

[mafusi46]

I also tried selecting the other option, "Yes, this distribution is excludable", which then prompts one to confirm the type of distribution:

T - Taxable Pension

G- Tax Exempt 

K - Keogh Distribution. 

I chose T in an attempt to force it. 

When I Continue, I'm brought back to the summary table and the code G is still present. 

I'm using the desktop version and do not see how to start the State return over. 

Thanks in advance for advice on how to proceed. 

[JamesG1]

TurboTax software is correctly reporting the income as not taxable to Massachusetts.

This Massachusetts Department of Revenue website states:

Pension and Retirement Income

Income from most private pensions or annuity plans is taxable in Massachusetts but many government pensions are exempt.