My 1099 R distribution is $26000 with $1335 for federal tax. TurboTax is telling me that that amount cannot be equal or greater than the taxable distribution. Why?

Can you clarify your question by providing more information?  What is in boxes 2a through 10 on Form 1099-R?

Edit the form too...you need to check the values that are actually in the various boxes

Especially boxes 1 and  4

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And if NY is in box 15, NY has issues when there are $$ in box 14 and not in box 16