My distribution is being treated as a IRA contribution rather than a rollover.

It sounds like you entered a Form 1099-R which reports an IRA distribution, as a rollover in your case. That shouldn't have anything to do with an IRA contribution which would result in the excess contribution message you are seeing. I suggest you look in the IRA contribution section and see if you entered an IRA contribution. You would be over the $7,000 limit if you contributed more than that or if you contributed more that your earned income to an IRA.

You enter an IRA contribution in the Deductions and Credits section of TurboTax, then Retirements and Investments, then Traditional and Roth IRA Contribution.

The result suggests that you mistakenly entered the amount as a traditional IRA contribution under Deductions & Credits.  You'll need to go back and remove that entry.  Nothing about the rollover is to be entered under Deductions & Credits.