Yes, you do need to report the 1099-R on your 2016 tax return.
When you enter the 1099-R into TurboTax, notice the code in Box 7. The codes for a direct rollover are "G" or "H" (if a Roth). TurboTax will pick up on this code and your distribution won't be taxable.
If this was an indirect rollover -- meaning you physically got the check and deposited the funds into another retirement account -- then you'll have a code other than "G" or "H". In that case, you'll answer TurboTax's question about what you did with the money by checking the box that says you moved the money to another retirement account. That will also result in it not being included in taxable income.
