Fidelity should not be reporting this as a Roth conversion. Because a traditional IRA is not eligible to receive a rollover from a Roth 401(k), the deposit in to the traditional IRA was an excess contribution. What Fidelity should have processed is a return of contribution from the traditional IRA and a rollover (not conversion) to the Roth IRA of an amount equal to the amount of the original distribution from the Roth 401(k). If there were any earnings while in the traditional IRA, these could not be rolled over and would be subject to tax and possible early distribution penalty.
If there were gains while in the traditional IRA, some amount that was moved to the Roth IRA should not have been. Those gains deposited into the Roth IRA must be treated as an ordinary regular Roth IRA contribution.
Correcting this in TurboTax would require creating a substitute Form 1099-R showing a return of excess contribution instead of code 2 or code 7 for a Roth conversion.
However, be sure that your rollover was from a Roth 401(k) and was not just a rollover of after-tax money from a traditional 401(k) account. What is the code in box 7 of the Form 1099-R from the 401(k) plan administrator?
