Distribution code on 1099 – R

[Carasu]

I received two 1099-Rs this year because I liquidated two smaller   401K’s for a down payment on a house. 
I believe I qualify for “the rule of 55.” 
I withdrew the funds after I turned 55, is and I had left both jobs from each 401(k) prior. 
One of my 1099 – Rs has distribution code 2, which is correct. 
The other  1099 – R has distribution code 1, which I believe is incorrect. 
Both withdrawals were made at the same time, and I was 56 at the time. I had left both jobs where I had held the 401(k)’s.

Can I just change the “1” to a “2” in TurboTax? 

[BillM223]

The problem with changing the "1" to "2" is that the IRS got a copy of the same 1099-R that still says "1".

I encourage you to read this article in Forbes that may exactly describe your situation. Notice especially the section under "You Can Only Withdraw from Your Current 401(k)".

[dmertz]

The code 1 is probably correct in indicating that that distribution does not qualify for the exception.  If you left that company that provides that 401(k) before the year that you reached age 55, you do not qualify that exception even though you qualify for this exception for distributions from the other 401(k).

If you actually had reached age 55 or over in the year that you left that company, you can claim the exception despite the code 1, but you do that on Form 5329, not by changing the code.