I entered a 1099R for military retirement pay. Why would turbotax think I made an early withdrawal?

[msimonjr]

My age (59) should not matter for military retirement pay.  Turbotax appears to think I owe a penalty but doesn't offer an option to identify military retirement pay as an exception.  When asked to identify the plan, none of the options include military retirement pay. (Qualified plans, Non-qualified commercial annuity, Modified endowment)

[DanaB27]

Please follow these steps to correct your 1099-R entry to avoid an early withdrawal message:

1. Login to your TurboTax Account 
2. Click on the Search box on the top and type “1099-R”
3. Click on “Jump to 1099-R” and you should see the “Your 1099-R Entries” screen
4. Click on "Edit" and continue until the "What kind of retirement plan do you have?"
5. Select "Non-qualified plan"

[msimonjr]

Thanks for the quick reply.  

I already have that block marked correctly.  However in the next screens it asks if any of the money was taken before age 59 1/2 (yes) then it goes through a series of questions culminating in: "We noticed you had to take out money from a retirement plan early. In some cases, withdrawing money could mean you'll have to pay extra taxes."

It then asks if I meet any of the exceptions to avoid penalty and only offers options that don't include military retirement pay.  (Qualified retirement plan (e.g., pensions, 401(k)s and 403(b)s), Nonqualified annuity (e.g., commercial annuities), Modified endowment contract (This is not common))

It won't let me go past this screen but doesn't offer an acceptable answer I can select.

[DanaB27]

Just to verify the military retirement pay was the only entry in the 1099-R section, or did you receive and enter any other 1099-R? 

What was the code in box 7?

If your military retirement is your only 1099-R then you might have to try to delete and reenter it.

@msimonjr 

[msimonjr]

I only have one 1099R entered.  The entry in block 7 is "7".  The "IRA/SEP/Simple" block is not checked. 

Just re-checked all the entries and don't see any problems.  Still getting the early withdrawal screens that I can't get past.  

[msimonjr]

Thanks for the suggestion.  I deleted it and re-entered it but still have the same problem.  I checked the preview 1040 and it is treating it as an early withdrawal with a significant tax penalty.  (Schedule 2, Part II, Block 6 - Additional tax on IRAs, other qualified retirement plans, and other tax-favored accounts.)

[DanaB27]

I would suggest contacting TurboTax directly for more specific help since I cannot see anything on your return. Please see What is the TurboTax phone number?