After you enter the 1099-R there are questions you have to answer, one of which asks for the source of the distribution and the state distribution amount. He also needs to make sure he chose his name as owner of the 1099-R and your name as the owner of the W-2. As he goes through the interview for that state, he should see screens allowing to remove your W-2 income or not allocating it to that state. To review the 1099-R or W-2 to see, on the very first line, whose name is showing as the owner, type the form name 1099-R or W-2 into the Search then click the Jump To. Edit the form that needs review when you come to the little summary showing all of each type of form entered.,