What is your question?
TurboTax is handling it correctly. You didn't say how much your wife took out of the retirement account. Let's say it was $945. So she took $945 out of the account, and rolled over $756. The remaining $189 was not rolled over. She used it to make an advance payment towards her 2021 tax, but it doesn't matter what she used it for. Any part of the withdrawal that was not rolled over is subject to the 10% penalty.
The $189 payment that she made will be applied to the tax on your tax return.
