The amount rolled over from the 401(k) to a traditional IRA is indeed income, meaning that it must be reported on your tax return, but it is nontaxable income that has no effect on your tax liability. The amount must appear on From 1040 line 5a but will be excluded from line 5b, with the word ROLLOVER shown next to the line. TurboTax will do this for you.
If the Form 1099-R has code G but the 401(k) plan mistakenly left box 2a blank, enter a zero in box 2a of TurboTax's 1099-R form to make sure that TurboTax treats it as nontaxable.
