Pennsylvania does not tax retirement income, so your military retired pay is not taxable here. Thrift Savings Plan money is treated differently: the TSP withholds no state or local tax but reports payments on IRS Form 1099-R, all TSP distributions are subject to state tax, and early distributions can be taxed at a higher rate.
There is nothing to apply for. Leave your military retired pay off the income you report on your Pennsylvania PA-40 return. If Pennsylvania tax was withheld from it by mistake, file a return to claim the refund.
Your Form 1099-R showing the retired pay, kept with your tax records.
