$220 of your wife's traditional IRA contribution is deductible because your MAGI of around $227,660 is in the phase-out range for deductibility of her contribution.
Because you, not your wife, is the one covered by the workplace retirement plan, your phase-out range in must lower, well below your MAGI.
When TurboTax indicates that no more than $220 can be elected to be made nondeductible, TurboTax is referring to the amount that would otherwise be deductible.
