There is clearly a program error: If TurboTax states unequivocably that it is not taxable, then computes as if it were, it is an error. Moreover, TT says it is "rare" to be correct check "No". In fact, there may be many who took out RMDs before the law changed, and that would make it not, "Rare."
The proper fix is to explain in the 1099R input process is to state, "If an RMD or other distribution was taken during 2020 and later returned or rolled over pursuant to the 2020-only provision not requiring RMDs, you should check the "No" box."
