Sub-S Distribution Error: Form 1120S p3-5: Total distributions should be blank ... Enter distributions and/or dividends directly on Schedule K, lines 16d and 17c.

Hi:

I am entering a Sub-S distribution as part of the shareholder information in TurboTax Business.   The ultimate goal is to create a K-1 that I pass to my personal return. Upon TurboTax review, I am told:

Form 1120S p3-5: Total distributions should be blank because you have checked the box NOT to compute Schedule M2 and/or NOT use the Schedule M-2/Retained Earnings Worksheet.  Enter distributions and/or dividends directly on Schedule K, lines 16d and 17c.

The amount appears in Schedule K -- Shareholder Distribution -- and Dividends Smart Worksheet” --Enter total cash and property --and in 16d, Distributions, but not in 17c – Dividend distributions paid from accumulated earnings and profits. All 3 boxes say pretty much the same thing.  So should I just remove the first number in the smart worksheet, leave the number in 16d and add the number to 17c?  If indeed the worksheet is related to retained earnings, I can see why it should not be there.  Retained earnings don’t exist in a Sub-S.  Can someone help me out?

Thanks for your help!

Terry