dmertz
Level 15

Retirement tax questions

Your Form 1099-R presumably has code 2 in box 7 to indicate that this distribution from the 457(b) plans is not subject to any early-distribution penalty and that's what TurboTax was referring to as an "additional tax."  Except for distributions of amounts attributable to funds rolled into a 457(b) plan from a non-457(b) retirement account, distributions from a 457(b) are not subject to early-distribution penalties no matter what you do with the money.