Yes, you must enter the $969 2017 distribution. You'll need to do the same on your 2019 tax return. TurboTax is asking in regard to the Retirement Savings Contributions Credit where amounts received from retirement accounts in the current tax year and the two prior years reduce the amount of current year contributions that are considered for the credit. This is because the lawmakers did not want you to be able to use a retirement distribution to make a new contribution and get the credit while not actually increasing your retirement savings.
