The payer will generally use distribution code 1 if the participant has not reached age 59½, even if the distribution is made for certain expenses that may qualify for an exception to the additional 10% tax on early withdrawals such as medical expenses, health insurance premiums, qualified higher education expenses, or a first-time home purchase.
Enter Form 1099-R in TurboTax exactly as it appears. Then, as VolvoGirl mentioned above, answer all of the follow-up questions in TurboTax that are asked in order to determine whether you meet an exception to the additional 10% tax. The distribution itself is taxable income as shown on your form.
See this TurboTax help article for more information about exceptions to the early distribution "penalty" additional tax.
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