No, that doesn't change the answer. As you mentioned, a 1099-R with code 7 and box Q is not taxable income.
The IRS considers Gross Income as:
"Gross income.
Gross income is all income you receive in the form of money, goods, property, and services that isn't exempt from tax. If you are married and live with your spouse in a community property state, half of any income defined by state law as community income may be considered yours. For a list of community property states, see Community property states under Married Filing Separately, later."
The 1099-R is exempt from Tax and wouldn't be added to the total income.
@Dgyp
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