This has nothing to do with Form 8925-E.
The distribution is income in the sense that it is required to be reported on your tax return, but the amount rolled over is excludible from taxable income. If you rolled over the entire gross amount of the distribution (substituting other funds for any amounts that might have been withheld for taxes), you should be seeing the enter distribution excluded from your taxable income. If that's not the result, you've apparently somehow told TurboTax that the distribution was an RMD; you must tell TurboTax that the distribution was not an RMD. Delete the 1099-R and try again.
