"do you think my spouse’s solo 401k with EE,ER contributions is considered as “covered by a retirement plan at work” per IRS ?"
Yes, contributions for the year to a solo 401(k) make that person covered for the year. This combined with your MAGI means that traditional IRA contributions are nondeductible. It seems implausible that TurboTax would have allowed a deduction on Schedule 1 line 20, particularly if TurboTax shows this as your MAGI on TurboTax's IRA Deduction Worksheet.
TurboTax did have a bug where it would miscalculate MAGI, if either of you have basis in nondeductible traditional IRA contributions and either of you receive income from an inherited traditional IRA. This bug was present for both the calculations of MAGI for the limit on the deduction for a traditional IRA contribution and the limit on a Roth IRA contribution. I saw that developers corrected one of these MAGI calculations in 2023 TurboTax corrected but I don't think that the other one was corrected. If this bug caused TurboTax to miscalculate your MAGI resulting in an improper allowance of the deduction on Schedule 1 line 20 and you have interest or penalty to pay on the balance due with the IRS correction, the TurboTax calculation warranty should reimburse you for the interest and penalty (but not the additional income tax itself).
