Bottom line: you shouldn't pay income taxes for the money you paid to her. That is income for her, and is her responsibility to report and pay taxes on (thus the negative income, and reference to the spouse's SSN and USFSPA, so if a human is looking, they theoretically know how to account for the difference between the 1099R reported income and what you're paying income tax on).
Turbotax does not make this straightforward at all. And it's such a niche thing, they may never.
You should recalculate with the negative income done properly, and then decide whether or not to file an amended return.
Good luck.
