I retired from teaching and receive a pension from the state system. In prior years, my 1099-R Box 7 code was "2", indicating Distribution with tax exception, because we are not required to pay early distribution penalties if we get these pension payments prior to age 59+1/2. However, I turned 59+1/2 eight months into Tax Year 2024, and the Box 7 code changed to "7" for Tax Year 2024, indicating a Normal Distribution. Turbotax now wants to charge me an early withdrawal penalty for the first eight months of the year before I turned 59+1/2. I asked for an amended 1099-R with code "2" but the state insists they are correct in changing it to "7" now that I'm 59+1/2. How do I fix this in TT so I don't pay early withdrawal tax?
