If the distribution was used for paying education expenses, and the student (or the taxpayer claiming the student) is also eligible for an education credit, there are options.
Part of the distribution can be claimed as income to free-up expenses for a credit.
It sounds like this is what's happening in your situation.
(When you click "Maximize my tax break" TurboTax decides, you can search letme and change if desired)
The program is asking the questions in order to determine your basis in the education savings account.
The 1099-Q shows earnings for the distribution, but the program wants to determine the earnings in the account balance.
IRS Pub 970 page 45 explains the calculation
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