A 1099 with a distribution code of W is a non-taxable transfer. However, I would include this 1099 on your income tax return and Turbotax will handle it correctly by listing it and not taxing you for it. The reason I suggest that you still include it on your tax return is because the IRS also gets a copy of your 1099, and if they see that it's not included on your tax return, they may come calling on you.
