I made a withdrawal from my 401K for 2025 because I was leaving my full time position. It was penalty free because I turned 55 last year. Where do I show that

[ac197024]

It's not giving me the option when I enter the 1099-R

[MinhT1]

If you separate from service during or after the year you turn 55, your early 401(k) distribution is exempted from the 10% penalty (but not from income tax).

Please read this TurboTax Help topic.

In TurboTax Online, please follow these steps:

1. After you have entered all your forms 1099-R, on the 1099-R summary page, click Done
2. Follow the interview until you arrive at the page titled Let's see if we can lower your tax bill. Click Continue
3. On the next page, click the pen icon next to your name
4. Continue the interview to the page These situations may lower your tax bill
5. Enter the amount of the distribution in the box next to Separation from Service and click Continue
6. Your early withdrawal penalty will be waived.

[dmertz]

If the Form 1099-R has code 2 in box 7, the distribution is automatically treated as being exempt from an early-distribution penalty and there is no need to file Form 5329 to claim this exception.