On a 1041, Turbo Tax is allocating qualified dividends to the trust. I've marked that 100% should go to the beneficiary. Is there a box I should check or uncheck?

Qualified dividends follow ordinary dividends. Is that not happening?

No, it's not.   I have an identical Trust and tracked it as I entered the data.  The  dividend $ were allocated to the Trusts once a K-1 with operating loss and a capital gain were entered.  It must not be a "check the box" issue.