Thank you @macuser_22 and @dmertz for your quick and insightful responses. I did confirm that I only input earnings (amount of distribution in excess of contributions and conversions which I agree are nontaxable) when prompted for amount applied toward first home. The discrepancy was indeed likely due to my prior history of IRA to Roth conversion. This resulted in a nonzero value for on line 23 of Form 8606 in my case but not in the case of my spouse (who has not converted IRA to Roth previously).
I deleted and reentered my spouse's 1099-R in order to trigger the prompts for first-time home purchase. Inputting an amount of earnings applied toward home purchase that was $1 less than the total amount of earnings withdrawn did result in a taxable event. Although this ended up reducing my federal refund by $1, it importantly generated Form 5329 (S) for my spouse, and was an excellent proof of concept. Thank you so much!
