Because there is no tax withholding on the From 1099-R, the details of your entry are not included in your filed tax return and this will be transparent to the IRS. This means that you could change the code to T when entering this form in TurboTax. Otherwise, this situation can only be handled in forms mode of the desktop version of TurboTax where it's necessary to mark the box labeled If box 7 code is J or T, check if qualified distribution. Step-by-step mode does not provide a way to mark this box.
No matter what method you use to cause TurboTax to treat the distribution as a qualified distribution, you'll also likely need to include with your filed tax return an explanation statement and documentation (generally a letter from a physician) supporting your claim of disability.
You can try to get Vanguard to change the code to T, but most financial institutions will decline to determine your disability status and will not change the code from code J.
