No, there should not be a penalty for early withdrawal from Fidelity- you should contact them directly if you are not sure. In most cases, the 401k has a minimum account balance (the $1,000), and because your balance was below that, they closed the account and sent you the balance (the $500). You would have to pay the penalty for early withdrawal to the IRS if you did not rollover the $500 to another 401k or IRA so you will need to file the Form 5329. TurboTax will automatically generate this if you go through the questions in the 1099-R section.
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