Attempting to transfer last year .tax file and turbotax says file is corrupted

Transfer the .tax2017 file into what?  The online version or Desktop program?
Here's an idea.  Do you still have 2017 installed?  Try opening 2017 program and see if you can get your 2017 return to show up in it.  Go to FILE - OPEN.  Then save it again with a name and place you can find.  Go to File - Save As.

Trying to transfer into the online version (which was used last year). Started this year with 2017 username/password in the free version but now need to upgrade to delux. so created new username for 2018 delux. When I attempt to download the 2017tax file from free version, the created file is rejected each time by 2018 delux as corrupted

There is no way to recover or repair a corrupted .tax file. If you have a backup stored in an alternate location please try that one.