Then the plan administrator should have known to use code 2 instead of code 1. You should contact them to make sure that they mark the account as a QDRO account so they can use the correct code for future distributions from this account.
For the distribution already received, in TurboTax go to Other Tax Situations -> Extra tax on early retirement withdrawals, indicate that the distribution was from a qualified retirement account and enter the amount otherwise subject to penalty (the entire Form 1099-R box 2a amount if you rolled none of it over) into the box labeled Alternate Payee Under QDRO. This will cause TurboTax to prepare Form 5329 Part I to eliminate the penalty.
