There is nothing wrong with TurboTax with regard to this. The code J used to identify the return of contribution as coming from a Roth IRA, but it's your responsibility to identify it as having been received after reaching age 59½ and to claim an Other reason exception to the penalty on the taxable amount shown on this code 8J Form 1099-R.
(Yes, TurboTax developers could theoretically add functionality to the program to check the age of the recipient to be able to recognize that the distribution was made to someone over age 59½ and to automatically populate the Form 5329 claiming the Other reason exception, but I doubt that will ever happen. In the past they tried to implement the penalty exception for the use of a distribution for medical expenses and they goofed that up enough that they quickly took that functionality back out.)
