Early Distribution via Substantially Equal Periodic Payment

[eagle1057]

I am using the Substantially Equal Periodic Payment (72t) exemption to take early distributions from my traditional IRA unitil I am 59 1/2 (greater than 5 years). This should allow me to avoid the 10% penalty, but I still need to pay income taxes on the distribution.

When I use code "2- Early distribution (except Roth)", the program does not charge me the penalty or the taxes. Is there a different code I should use or is the software not written correctly to avoid the penalty, but charge the income tax?

When I call TurboTax, they want to charge me $80 to talk with a tax expert. The thing is, I know the tax law, I just can't figure out why TurboTax isn't calculating correctly.   

Thank you in advance

[MinhT1]

In TurboTax, you can indicate that you are taking equal periodic payments to avoid the 10% penalty.

In TurboTax, please follow these steps:

1. After you have entered all your forms 1099-R, on the summary page Review your 1099-R Info, click Continue
2. Follow the interview until you arrive at the page titled Did you use your IRA to pay for any of these expenses?
3. Enter the amount of your distribution the box next to Equal Periodic Payments and click Continue
4. Your early withdrawal penalty will be waived.

[dmertz]

And do not modify the code.  Leave it as code 1.