"do I actually enter the form into last year's turbo tax or just change
the amount recharacterized to the correct amount? Do I enter this
1099-R form in my 2017 return?"
Note that a code R Form 1099-R reports the amount transferred, not the amount recharacterized. The amount transferred is the amount recharacterized adjusted for any gain or loss. In 2016 TurboTax you probably already correctly entered the amount recharacterized.
There is no need to enter the code R Form 1099-R into 2017 TurboTax. Other than to tell you that the recharacterization should have been reflected on your 2016 tax return, 2017 TurboTax will ignore the code R 2017 Form 1099-R.
"Do I amend last year's return and enter the form or just amend the amount? And do I enter this form in this year's turbo tax?"
Any earnings distributed with the returned contribution, shown in box 2a of this code P1 2017 Form 1099-R, was reportable on your 2016 tax return. The box 2a amount should have been included on 2016 Form 1040 line 15b. 10% of the box 2a amount should have been included on 2016 Form 1040 line 59 unless you filed Form 5329 claiming an exception the the 10% early-distribution penalty. These entries would have resulted if you already entered a Form 1099-R replicating the one you actually received.
There is no need to enter the code P1 2017 Form 1099-R into 2017 TurboTax.
Other than to tell you that the return of excess contribution should have been
reflected on your 2016 tax return, 2017 TurboTax will ignore the code P1
2017 Form 1099-R.
Neither the earnings transferred in the recharacterization nor the earnings distributed with the return of contribution have any effect on your basis in nondeductible traditional IRA contributions.
