Yes, you seem to meet the requirements for the exemption for your primary residence.
The first question I would ask is do you have the sale in the correct section? It should be under Sale of Home under Less Common Income in the Income and Expenses section of the Federal return.
If you have entered the information in the correct spot, at this point I would suggest deleting the information and starting over with the sale of your home.
- In the left-hand black menu, choose Tax Tools, then Tools.
- Click on Delete a Form from the window that pops up.
- You should now see the Review Form List. Scroll down the list and click Delete on Home Sale Worksheet (your address).
- You may get a pop up telling you additional worksheets and forms are being deleted. Approve and click delete.
- You should come back to the Review Form List. Scroll to the bottom and click Continue with My Return.
For more information, click here.
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