TurboTax has not yet implemented the ability to report Coronavirus-Related Distributions. The IRS has not yet released the Form 8915-E needed to do so. Until they do, entry of the Form 1099-R will result in TurboTax showing the penalty. Once the ability to report a CRD is implemented in TurboTax you'll need to go back through the entry of the Form 1099-R to indicate that the distribution was a CRD.
