TurboTax always presents the pictured page in response to the Form 1099-R having code 2 in box 7. Code 2 means that the payer knew that the distribution qualified for an exception to the early-distribution penalty, the extra tax to which TurboTax's page refers, despite the fact that you were under age 59½ at the time of the distribution. This page confuses many people who are not aware that it refers only to the early-distribution penalty. It's not clear why the TurboTax editors chose to use this legalize, referring to it by its legal definition as an excise tax, rather than than using the commonly used term 'penalty.' There are many places in TurboTax where the editors have erred by oversimplifying text to make it easier to read, to the point that it obfuscates whatever they are trying to say rather than making it easier to understand.
