Getting an incorrect result under these circumstances requires making two errors, the first one being telling TurboTax to use the Simplified Method when you should not and the second one misstating your (after-tax) investment in the plan. If when going thorough the Simplified Method you had correctly indicated a $0 investment in the plan, the calculated result would have been that the entire distribution was taxable and the amount included on Form 1040 line 5b would have been correct. Because of the way that TurboTax presents the questions, these are not an uncommon errors, particularly because TurboTax does not make it clear that the investment in the plan refers to your after-tax basis in the plan. You are not alone in this. Many have posted on this forum who have made the same mistakes.
Unfortunately, this is not a calculation error and Intuit will likely see this as being user error. The accuracy guarantee does not apply to user errors.
