Make sure that you entered the code D amount only in box 12 of TurboTax's W-2 form, nowhere else in TurboTax. A 401(k) is not an IRA. Many people make the mistake of thinking that a 401(k) is an IRA that needs to be entered as an IRA contribution; it's not.
Make sure that you correctly selected code D for this entry in box 12 TurboTax's W-2 form. There are other codes that could be mistakenly selected that can cause the associated amount to be treated as taxable income.
If you made a separate IRA contribution but your elective deferrals left you with an amount in box 1 of your W-2 to support the IRA contribution, you have an excess IRA contribution that is subject to a penalty unless the excess is corrected by a return of contribution before the due date of your tax return.
