The questions for the 10% early withdrawal penalty exception do not appear right after you enter the 1099-R, they're later in the program after you finish Deductions and credits.
To enter the exception, starting from the "Federal Taxes" tab, select "Deductions & Credits". Select "Choose Explore on my own or I'll choose what to work on ." At the end of the Deductions & Credits section, select the "Done with Deductions" button. After several screens (depending on what entries you've made) you will come to the “Penalty May Apply” screen. Here you can pick the exception.
You can also go to the section under:
Federal Taxes,
Other Tax Situations,
Additional Tax Payments,
Extra Tax on Early Retirement Withdrawals
