You have to pay close attention!  The only time you get to reduce the taxable portion of a Veterans Retirement income shown on the 1099-R is if the Veteran is specifically declared a "Concurrent Combat Related Disability"  (CCRD) Retiree, This is a special category of disability approved by the VA.  Any other tax free adjustments are only allowed if the VA made an after the fact adjustment to the disability and it should have affected the taxable amount on the 1099-R.  Many veterans are 100% disabled and retired, but are not :CCRD" and can not adjust the taxable retirement on their 1099-R.