Retirement tax questions

Did you roll the funds over from one account to another?

If so, then Box 7 of your 1099-R form would be marked as a rollover. (Code G or H).

If those boxes are not marked as Code G or H, but you did roll the money over within 60 days, you also should see the following screen as you proceed through the interview screens. 

Review your answers here to reflect the rollover.

This will remove the income from showing up as long as you did meet all of the rollover dates.