I am having the exact same issue with it adding early withdrawal penalty.
Just got off live chat with TurboTax rep. Please spread the word! I would hate to see people who don't realize it thinking they owe thousands of dollars they don't owe. No one needs that kind of stress, especially right now.
This was her response to the question:
"There is no penalty for military DFAS 1099-R form distributions, with box 7 set with a code 7, no matter whether it was before or after age 59.5.....but right now, the software isn't dealing with it properly. The programmers have been informed, but could take a couple weeks to fix."
