If the veteran is receiving concurrent combat related disability and has been qualified as such by the VA  and give up a portion of their normal VA disability pay, they are entitled to additional exclusion of income from their 1099-R amount of taxable income.  Based on IRS code sectiu9nb 1.122-1 (d) examples 4, 5 and 6, based on their original retired active duty pay and less retired pay waived, the veteran can get 70% of their normal military retirement pay excluded from income.  I've got VA clients that have claimed it for years.  Google it, you'll never get a correct answer here, too complex of an issue.