Alabama 1099-R income is Alabama state tax exempt. Then why it is listed as income in Alabama Form-40, in Part I - Line 5b?

[IreneS]

To indicate that your AL pension is exempt from AL taxes, please follow these steps:

1. As you go through the AL return, you will see a screen, About Your Retirement Distributions.
   
2. Click Edit next to your retirement distribution.
   
3. On the screen, Alabama Special Handling of This Distribution, if your retirement is included in the list, click the Yes box to indicate that the distribution is not taxed by AL.
4. You will be brought back to the screen, About Your Retirement Distributions.  You will see that there is a zero (0) entry in the AL Taxable Pensions/IRAs column.
5. If you need to select another plan, click Edit next to that plan and perform the same steps.  If not, click Done.