Once you have entered your Form 1099-R for your retirement distribution, TurboTax will ask you several questions related to the distribution. To enter the amount that qualifies for the exception to the early withdrawal penalty, please follow these steps:
- Answer all the questions very carefully and then you will reach the section: "Let's See If We Can Lower Your Tax Bill."
- Click on "Continue" and the program will ask you the type of plan you took the distribution from.
- Next, the program will provide a list of the exceptions where you may not have to pay the penalty for early withdrawal. Enter the amount of your distribution that was used for the exception, in the corresponding box.
- TurboTax will determine whether you qualify for the exclusion.
Please click on this TurboTax Article for a list of exceptions to the early-withdrawal penalty on 401k distributions.
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