No, you did nothing wrong. Primarily, the question wants to know if you rolled your money (all or part) to another retirement account. The follow-up questions for a 'yes' response determines the tax treatment.
If you entered your form exactly as it is reported and didn't move the money to another retirement account, mark the 'no' radio button. Code W means your distribution is excludable from income.
To verify that the form is reflected properly on your return:
- Select My Account
- View Tax Summary from the blue links
- Preview my 1040 in white space under My Account
- Scroll to line 16 a and b
- Total distribution should be listed on line 16a, and 16b (or 15 a and 15 b depending on the 1099-R) should have a '0'
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