To be clear, the withholding on your 1099-R is not "tax that you have paid"; It is money that has been set aside to eventually apply to the tax due if and when you complete your return.
The actual tax owed from the income on the 1099-R may be more or less than the amount that was withheld.
As Dawn suggested, there may be something else that causing the request for the upgrade. Please look at this page showing tax forms supported in each (Online) product and see if something jumps out at you.
Note that I can't be sure because I cannot see your tax data, but you may qualify for the IRS Free File program by TurboTax.
TurboTax does participate in the IRS Free File program. See this link for more information.
Note that this is at a different URL than the Free Edition product by TurboTax.
If you have already started your return in Free Edition and want to switch to IRS Free File by TurboTax, please see the link at the bottom of the screen above that reads (or click here) "How do I switch to IRS Free File Program delivered by TurboTax?"
Note that you may not qualify for the IRS Free File program. You can read about eligibility at the link at the top of this answer.
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