A 1099-R is retirement income. The money you withdrew is your income. In a traditional IRA, your basis is zero. If you are living in PA, possibly your state return is asking if you were a state employee or someone else whose retirement income is tax-free to PA state taxes. TurboTax does not capture this in the federal interview and sometimes must ask state-specific questions to address times when state tax law treats income differently than federal law.
