Yes. It appears that this is not a TurboTax bug, rather it is a New York State requirement for e-filing. See page 12 of https://www.tax.ny.gov/pit/efile/errorcodelistingty2016.pdf A taxpayer may not e-file if he withheld 100% of his NYS distribution (which I did).
I ended up entering a withholding in Turbo Tax that is $1 less than is on the 1099R. I was then allowed to e-file (and hence overpaid my NYS tax by $1). I am sure NY will thank me by putting me in jail for not accurately entering my 1099.
