Its technically considered income, which is why it will show up on the income summary pages in TurboTax. But, it is NOT taxable income (provided your rollover was done properly and to a Traditional IRA), so it does not effect your income numbers on the tax return (AGI and taxable income).
You can view the distinction best by looking directly at a copy of Form 1040. Look at Line 15a and 15b and the distinction the IRS makes between the income and taxable income lines. Only 15b - taxable income actually gets used in the calculations. But, the whole rollover amount will show on Line 15a.
