No. It is not a TurboTax glitch. The 25% IRS penalty is calculated if you "missed" an RMD that you were required to take.
I put it in quotes because in your case, your RMDs have been automatically calculated in that the payout itself is fulfilling your RMD.
Therefore, you can return to the software and, if you are asked about your RMD (probably due to your age now triggering the RMD prompts, which you understand), you can indicate that "All of this distribution was a RMD".
To designate the RMD amount from Form 1099-R, do the following:
- Return to your 1099-R entries by clicking Review to the right of IRA, 401(k), Pension Plan Withdrawals (1099-R) in the Federal Wages & Income
- Click on the pencil to the right of the first 1099-R
- Click Continue through the entries you've made
- "Let's get more information about your Required Minimum Distribution (RMD), enter the amount of your distribution as your RMD that was due by December 31, 2025, Continue
- On the next screen, "How much of this distribution applied to your December 31, 2025 RMD?", select "The entire distribution applied...", Continue
- When you reach, "Review your 1099-R summary, Continue (not the pencil)
- When you reach, "Let's go over any required minimum distributions (RMD), Continue (not the pencil)
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