@cnauerd
Your question makes no sense and you changed your answer on whether there is a code 1 or code M in your 1099-R.
Let's start with the basic rules. If you leave the company with an outstanding 401k loan, you have 60 days to repay it. If you miss that deadline, the amount of outstanding balance is considered an "offset distribution" and should be reported with code M. In other words, the money you kept is considered a distribution (withdrawal), and you pay tax on it because you did not pay tax when you originally borrowed the money. You also pay a 10% penalty unless you were 55 or older when you separated from service. You should have gotten a 1099-R with code M for the offset distribution for the 2023 tax year.
That is normally the end of the story. Your loan is converted to a withdrawal and you pay taxes on it. There is no requirement for repaying it.
You have the option of "repaying" the loan from other funds by making a payment to the original plan or to a new plan, including a private IRA, by the tax deadline of the year you separated from the company (so, April 15, 2024 or October 15, 2024). This is considered a special type of rollover, and it makes the offset distribution non-taxable. Normally, if it is after the 60 days, but before the tax deadline, you have to make the rollover to another account like an IRA or a new employer's 401k, because the old 401k usually won't take the rollover after 60 days. All this would be reported on your 2023 tax return.
It makes absolutely no sense to withdraw money from plan A to repay an offset distribution from plan A. But, assuming you did that, then this is what I expect should have happened:
1. You get a 1099-R in January 2024 for the 2023 offset with code M.
2. You withdraw money in 2024.
3. You repay the loan in 2024.
4. You report on your 2023 tax return that you got the 1099-R for the offset, and that you rolled over the funds by repaying the offset before the tax deadline. You would owe no tax for the offset distribution on your 2023 tax return.
5. You get a 1099-R in January 2025, for the 2024 withdrawal with code 1 (normal distribution). This is taxable income on your 2024 return, and is also subject to the early withdrawal penalty unless you are either age 59-1/2 or older; or you were age 55 or older when you separated from the company.
In Turbotax, after entering the 1099-R, keep going through all the following screens, don't jump to someplace else. Eventually there should be a page that asks "Let's look for some exceptions that can reduce the penalty" and one of the choices should be, you withdrew money from a qualified workplace plan after separation at age 55 or older.
