You have not paid a penalty for the early withdrawal from the tax deferred retirement account. The 10% early withdrawal penalty is only assessed when you complete your tax return. You must have entered the Form 1099-R for the withdrawal on your tax return.
If the withdrawal was from an IRA and you are a first-time homebuyer then the penalty will be waived on the first $10,000 of the withdrawal. If the withdrawal was from a non-IRA then there is no waiver of the penalty for the home purchase.
The TurboTax program will ask you a series of questions based on your entry of the Form 1099-R either immediately after entry of the 1099-R or later in the interview in the Other Tax Situations section for exceptions to the 10% early withdrawal penalty.
To enter 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
