The education penalty exception only applies to distributions from IRAs. If the distribution was not from an IRA, TurboTax will not offer you the opportunity to enter any amount for the education penalty exception. A Form 1099-R reporting a distribution from an IRA that would be eligible for this penalty exception would have the IRA/SEP/SIMPLE box marked would have code J in box 7. Distributions from a qualified retirement plan like a 401(k) do not qualify for this penalty exception.
