You know I think we figured that before requesting a hardship and yes certain financial hardship is exempt from the penalty it just makes confusing when it uses code 12 generic other. You report excalty what your 1099R says and no cant change codes etc but enter it correctly most times we still get the code 12 cause turbo software doesn't list all the reasons for withdrawal. Asthe paperwork you filed to requesting hardship withdrawal explains this. Keep all receipts and records showing that you used every dollar amout just for that hardship
