I assume that the From 1099-R does not have the IRA/SEP/SIMPLE box marked and because that the MA tax person is expecting it to be present on line 5 (not line 4) Form 1 line 4. This Form 1099-R indicates that there was a return of an excess deferral, perhaps because the plan failed ADP or ACP testing. The amount of the excess deferral is includible on Form 1040 line 1 because it had been excluded from box 1 of your W-2. See the first bullet on page 11 of the 2020 IRS Pub 525:
https://www.irs.gov/pub/irs-prior/p525--2020.pdf
