You don't have to pay a penalty on a pension, even if you do have a code 2 in box 7.
There are two key entries that will successfully clear the penalty.
- Post the 1099-R exactly as it is
- Continue through the Interview
- When it asks for an RMD enter -0-
- This should reduce your tax due.
- Further in the interview, indicate that you received regular monthly payments.
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