'Virginia tax return 2020 shows subtraction $32,000 Code 31 where did this come from? Tax examiner is assessing back taxes?

[JulieS]

Yes, in Virginia the code 31 subtraction is for Retirement Plan Income Previously Taxed by Another State. 

The instructions for this subtraction are:
"Enter the amount of retirement income received during the taxable year on which the contributions were taxed in another state, but were deductible from federal adjusted gross income during the same period. The total amount of this subtraction cannot exceed the amount of the contributions previously taxed by another state, usually in a previous year." - instructions for VA Form 763

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