Thanks. Yes, military retirees already have their 1099-Rs. I have a straight-forward 1099-R from Defense Finance and Accounting Service, code 7 in Box 7, IRA/SEP/SIMPLE box on this 1099-R is blank, picking non-qualified on that screen, nothing else special about the 1099-R or me. Had 2 months fall under the 59 1/2 status. When I answer "yes" to the question "Did you receive any of this money before you turned 59 1/2?". I see my status change from getting all $2K of paid tax back (This is the only income I've entered this early), to owing $700+. If I lie and say "no" to the "Did you receive any of this money before you turned 59 1/2?", I get all my tax back. TurboTax may have their coding wrong.
