Yes, you must enter the distributions made in 2017 and 2018 that you did not roll over. These amounts will not be taxed again but are subtracted from the amount of your new contributions to determine how much of your new contributions are eligible for consideration of the credit. This prevents people from using the money that is already retirement savings from using that money to get the credit by just taking money out and putting it back as a new contribution. The intent of the credit is to encourage increases in retirement savings, not to promote recycling of existing retirement savings.
