The early distribution penalty of 10% of the gross distribution is Only assessed and reported on your federal tax return, Form 1040. What was withheld on the Form 1099-R is the estimated federal taxes for the distribution.
The distribution is entered on your tax return as ordinary income. The federal taxes withheld are entered on your tax return as a tax payment.
To enter, edit or delete a form 1099-R -
Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Scroll down to Retirement Plans and Social Security
On IRA, 401(k), Pension Plan Withdrawals (1099-R), click the start or update button
Or enter 1099-r in the Search box located in the upper right of the program screen. Click on Jump to 1099-R
