I just tried this exact sequence several times, but I never get the screen that asks me if I have a Retirement Plan at Work. Instead, it just ends by telling me that I cannot deduct my IRA because I exceed the MAGI (which would be true if we were both covered by a retirement plan, but we fall under the limit for married filing jointly where one party does NOT have a retirement plan).
The sequence you suggested is the one that originally brought me to the prompt, which I answered in the negative. At that time, it permitted me to deduct my IRA contribution (my 1099 is earned income). When I came back to Turbotax the next day just to print out my record, however, it had somehow reverted to being excluded from deduction, which made a very sizeable difference for my return.
