No, I am sorry to say that you are misreading the instructions.
Line 4 on form 8880 is used to reduce the amount of contributions you made to IRAs and retirement plans. That is, you can't get credit for contributions to an IRA or retirement plan while you're busy taking money out at the same time.
It is line 8 on the 8880 that you need to look at. What is the amount on line 8b on your 1040? I bet it is the $37k that you are talking about - and this is what disqualified you from the credit.
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