It may because you need to upgrade to the Deluxe version of TurboTax. I notice you are in the Free Edition which only supports W-2 Wages and the Earned Income Credit.
Once you update the program, you should be able to generate the additional forms required to report your 1099-R distribution. This should also correct your state issue and allow you to report the exemption of the retirement income from taxes in North Carolina.
Forms included in TurboTax products
How to upgrade in TurboTax online
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