Yes, you can enter the return of the RMD and you won't be taxed on the returned amount.
Please follow these steps to enter your 1099-R and RMD rollover:
RMDs were waived for 2020. You must indicate to TurboTax that none of the distribution was RMD. If you already enter the 1099-R as RMD and changing your answer to the RMD question doesn't work then you have to delete and renter the 1099-R form.
You can verify your entry by looking at your Form 1040 line 4 or 5:
This solution didn't work. The IRS disallowed the money rolled back into the account and changed my refund amount accordingly. The IRS thinks I contributed too much money becuase that is the amount shown as goingn back into the IRA. How can I fix this?
To clarify, you had entered the RMD as a rollover and it showed as $0 taxable with stating rollover next to it on line 4 on Form 1040 but the IRS disallowed the rollover?
Did you have more than one rollover into that account? There is a one rollover per year limit. Please see IRA One-Rollover-Per-Year Rule for details.