How do I complete form 5329 for exception for early withdrawal from 401k

Forum|Forum|3 months ago
March 8, 2026
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I had to do early withdrawal of part of my 401k due to being disabled. I lost my job due to being on long term disability. I input my 1099R, but the option to complete the exception form did not come up as option. How do I access?

VolvoGirl

Level 15

Here is an old note. See if it helps you find it.

The questions about exceptions to the penalty do not come after entering the 1099-R. Rather, you will see that area after you have finished all the Deductions and Credits section.

To enter the exception, starting from the "Federal Taxes" tab, select "Deductions & Credits". Select "Choose Explore on my own or I'll choose what to work on ." At the end of the Deductions & Credits section, select the "Done with Deductions" button. After several screens (depending on what entries you've made) you will come to the “Penalty May Apply” screen. Here you can pick the exception.

You can also go to the section under:
Federal Taxes,
Other Tax Situations,
Additional Tax Payments,
Extra Tax on Early Retirement Withdrawals