1099-R Form with Code J, TurboTax didn't make me pay the 10% penalty

[cpoole1]

Hi, I had received a 1099-R form for withdrawing contributions from my ROTH IRA. On the form, I got Code J, which means early withdrawal, with no exceptions. To my understanding, there would be no penalty for withdrawing contributions as long as I have had my ROTH IRA for at least 5 years. I had made multiple different withdrawals and only one of my withdrawals had made the 5-year mark. Regardless, I accepted the 10% penalty as I got frustrated with trying to figure out if the 10% penalty applied to me or not.

My question is that it showed me the 10% penalty I needed to pay and then after I had entered everything and it was time to file my taxes I never saw the amount for the penalty. I just want to make sure I don't have to pay the penalty somewhere else or maybe TurboTax corrected the Code J since what I withdrew was contributions and I did make the 5-year mark?

[DanaB27]

You can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free. 

The 5-year rule applies to conversions and certain rollover contributions from a qualified retirement plan to a Roth IRA. If you withdraw them before the 5 year mark then you may have to pay the 10% additional tax on early distributions. Please see Distributions of conversion and certain rollover contributions within 5-year period for additional details.

If you did not get the 10% penalty then you probably withdrew only your contributions. Please review the Roth follow-up questions:

1. Login to your TurboTax Account 
2. Click on "Search" on the top and type “1099-R” 
3. Click on “Jump to 1099-R” and enter all your 1099-Rs
4. Click "Continue" on the "Review your 1099-R info" screen after you entered all you Form 1099-R
5. Answer "Owned Any Roth IRA for Five Years?" screen
6. Continue through the questions and make sure you enter the net contributions prior to 2024 on the "Enter Prior Year Roth IRA Contributions" screen

[cpoole1]

Yes I went through that already and after I entered my 1099-r and answered those questions you listed out, it showed that out of the $3750 I withdrew, I had $700 left in my Roth before 2024 (I never contributed any more after 2024). It then showed the 10% penalty for only $3050 which is $305 and then I just continued through filing and then at the end it never mentioned the $305 so that's where I am confused as I have already filed so when I search 1099-R on turbo tax it doesn't take me to my 1099-R or doesn't say 'jump to 1099-R' it only shows community posts.

[DanaB27]

You can see the early withdrawal penalty on Schedule 2 line 8. And this will carry over to Form 1040 line 23.