You need to select your penalty exception inside of Turbo Tax, after entering the 1099-R. The penalty is addressed a few screens after the 1099-R summary, so you may not have gotten there yet.
You can also get to the penalty exception here:
- Federal Taxes
- Other Tax Situations
- Additional Tax Payments
- Extra Tax on Early Retirement Withdrawals.
- Choose "Qualified Retirement Plan"
- Separation from Service the Year After age 55.
Qualified retirement plan distributions (does not apply to IRAs) you receive after separation from service when the separation from service occurs in or after the year you reach age 55 (age 50 for qualified public safety employees).
https://www.irs.gov/pub/irs-pdf/i5329.pdf
