I tried another method--I chose Qualified Plan instead of Non-Qualified and answered the remaining questions appropriately and it didn't apply the penalty. The key to the problem, it seems, is when appropriately choosing the Non-Qualified Plan option and then having to answer the question, Was This Distribution From a 403(b) Plan? You have no choice but to choose No, it's another type of qualified retirement plan, even though you've already said it was Non-Qualified. Any way you answer the remaining questions after that result in a penalty unless you answer "0" for RMD amount due by December 31, 2024.
