can the amount of an early withdrawal penalty in box 2 of my 199-int form be deducted from interested income reported in box 1?

[jonlynne]

or has the early withdrawal penalty already been deducted from the interest income before the bank posted the interest income in box 1?

[CatinaT1]

No, you don't deduct it from the interest, but enter everything just as it shows on your 1099-INT Form. You will receive an adjustment to income for the early withdrawal amount. TurboTax will automatically do that based on your entry in box 2.