Amend for new 1099-R. top of screen and prints that I owe $4K, but in the main body of the screen, I don't owe any tax because there is a '2' in box 7 on the 1099-R.

[jbuch413]

amending a 2016 return in Turbo Tax to enter a new 1099-R.  TT says I owe $4K, but in the main body of the screen, TT says I don't owe any tax because there is a '2' in box 7 on the 1099-R.  When I print the return, the 1040X says I owe $4K.  Do I owe $0 or $4K?   And if I owe $0, do I skip the amended return?

[jerry2000 · Accepted solution]

All that the "2" in Box 7 means is that you do not have to pay a penalty for early withdrawal, and that is all that it means, it does not mean that the distribution is not taxable. The distribution is fully taxable as ordinary income.