Federal tax review flags an error and asking for an entry for Sched 1 Line 8 z7b. At what step I enter the information (instead of direct entry)?

Schedule 1, Line 8 is for miscellaneous untaxed income you earned but did not report anywhere else on your tax return. Line 8 is split out into lines 8a through 8p, plus 8z for any income not listed.

Income to include on line 8 includes such items as gambling winnings, prizes, awards, cancellations of debt, jury duty pay, Alaska Permanent Fund dividends, and taxable distributions from an ABLE account. 

Revisit the Wages and Income section of TurboTax to review your entries. These types of entries would normally have been made under Less Common Income.

See this thread for a discussion of a similar issue.