Revisit the Form 1099-R entry section. It provides two Box 7 entry fields, so you can enter both 7 and D. When you finish the entries and get to the screen, "Your 1099-R Entries... Here's what we have so far", be sure to click Continue so that you can answer all the follow-up questions that enable TurboTax to determine whether the Form 5329 is needed.
You can delete a form in TurboTax Desktop by bringing up the form in Forms Mode and clicking Delete Form where it appears, normally at the bottom of the form screen.
Form 5329 is automatically generated when TurboTax determines that the additional tax is due. If after correcting any entries that generated it, the form still appears but with no information, it can be deleted.
In the case of an early withdrawal, you will pay regular income tax on the distribution at your applicable tax rate, plus an additional 10% "penalty" tax for the early withdrawal. TurboTax correctly calculates this for you.
Please see this TurboTax tips article regarding early withdrawals.
Please see this TurboTax help article regarding exceptions to the penalty.
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