Alabama allows for some retirement income to be excluded while some needs to be included as income on your return. The program will not include the retirement income on the return unless you make a manual entry adding the income to the State Section.
To make the manual entry, go to:
- State Section
- Adjustments to Income and answer the questions regarding the taxability of the retirement income.
For your convenience, the federal amount of the retirement income is shown for you to refer to.
See also Is my military pension/retirement income taxable to Alabama?