If TurboTax literally said that you do not owe tax on this distribution, it suggests that you somehow told TurboTax it was an ordinary rollover instead of a Roth conversion. I suggest deleting the Form 1099-R that reports the distribution from the SEP-IRA, then reentering it as shown on the Form 1099-R provided by Fidelity. In the questions that follow, indicate that you moved the money to another retirement account, that you did a combination of rolling over, converting and cashing out, then indicate that amount that was converted to Roth (perhaps the entire amount.
