How do you enter a 1M in Box 7 - Distribution Code? There is no option for this in the drop down menu.

[dmertz]

This is a pair of codes, code 1 and code M.  Select code 1 in TurboTax's first box-7 box, mark the box below to indicate that you have a second code, then select code M in the second box.

Note that you have until the due date of your 2022 tax return, including extensions, to come up with the funds an complete a rollover of this qualified offset distribution and be able to continue to defer the income and avoid the 10% early-distribution penalty on whatever portion you can roll over.

[JohnB5677]

A code 1M distribution is taxable and can be subject to an early-distribution penalty unless you roll it over to an IRA account before the due date of your tax return, including extensions.  (The extension would give you until September).

"1" indicates an early distribution, with no known exception (in most cases, underage 59½). 

• There may be a 10% early withdrawal penalty.
• You may be exempted from the IRA early withdrawal penalty if you are withdrawing money to pay. 
  • Roll it over, or for
  • qualified medical expenses, 
  • pay health insurance.
  •  if you are unemployed, 
  • pay qualified education expenses, 
  • fulfill an IRS levy, or because. 
  • you are disabled and unable to work.

"M" indicates a Qualified plan loan offset.

• The code M is an offset distribution. 
• you have until this due date of your tax return, including extensions, to come up with some or all of the money to roll the distribution over to a traditional IRA (or a qualified retirement plan). 
• The code M for the offset distribution simply extends the rollover deadline from the normal 60 days to the due date of your tax return, including extensions
• Whatever amount you rollover is an amount on which you will continue to defer taxes and avoid the early-distribution penalty.  
• Whatever amount you are unable to roll over by the deadline remains distributed and subject to early-distribution penalty.