Apparently you have basis in nondeductible traditional IRA contributions. Until you enter your year-end balance in traditional IRAs, TurboTax assumes that that balance is zero and calculates on Form 8606 an incorrectly high nontaxable amount of the distribution. Once you enter the correct year-end balance, TurboTax recalculates and produces the correct nontaxable and taxable amounts, appropriately increasing your taxable income. This increase in ordinary income apparently has also increased the taxable amount of your Social Security income appropriately.
"The amount of income doesn't change"
The amount of taxable income changes when you change the year-end balance entry. Only with the correct year-end balance entered can TurboTax a correct overall tax liability. Without the year-end balance entered, the tax liability that TurboTax calculates will be artificially low.
This answer has been verified for accuracy by an Intuit expert employee
