Retirement tax questions

To clarify, was the value of all of her traditional/SEP/SIMPLE IRAs $0 on December 31, 2024?  If not and she had pre-tax funds in her IRA then pro-rata rule applies. This means that with each distribution/ conversion you will have a taxable and nontaxable part. You can see the remaining basis on line 14 of Form 8606, this basis can be carried forward.

You entered her $6,500 basis from the 2023 Form 8606 line 14 when TurboTax asks about her prior nondeductible contributions? 

To enter the Form 1099-R conversion in TurboTax Desktop: 

1. Click "Federal Taxes" on the top and select "Wages & Income"
2. Click "I'll choose what to work on"
3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)" 
4. Answer "Yes" to the question "Did You Have Any of These Types of Income?"
5. Click "I'll Type it Myself"
6. Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
7. Click "Continue" and enter the information from your 1099-R
8. Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account”
9. Then choose “I did a combination of rolling over, converting, or cashing out money.” and enter the amount next to "Amount converted to a Roth IRA account"
10. On the "Your 1099-R Entries" screen click "continue"
11. Answer "yes" to "Any nondeductible Contribution to your IRA?" if you had any nondeductible contributions in prior years.
12. Answer the questions about the basis from line 14 of your 2023 Form 8606 (should be $6,500) and the value of all traditional, SEP, and SIMPLE IRAs

Yes, you can delete and restart your State return and see if that will fix the state issue. Please see How do I delete my state return in TurboTax Desktop for Windows?

@bitjockey