I had the same question. So, after 2.5 hours on the phone with a Tax Pro and him on with tech support, it turns out that Turbo Tax has not yet been properly setup to deal with Covid distributions.
In the future, maybe a few weeks, there will be an additional question added after it asks if you had a Covid related withdrawal in 2020. That additional question should ask something to the effect of, have you already claimed all that income and paid all the taxes? If you say you have paid all the taxes, then it will remove that amount from your income and your taxes will be correct.
The guy could not give me a definite date the fix would be in place. He said his best guess is maybe mid February. This year at least the IRS had the forms published on 1/3/24. We just have to wait for Turbo Tax to incorporate it.
