I made an early withdrawal from a government retirement account. The 1099-R says it's Distribution Code 1, which causes TT to ask for the 10% penalty. So does this mean my retirement account is NOT a 457 plan? Or do I have to tell the IRS that it's 457 in the TT exception area? Shouldn't the 1099-R specify if it's a 457 account if it IS a 457 account?
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A 1099-R does not tell you the type of plan. I believe the way you handle this is to enter the 1099-R. After the 1099-R entries screen that asks if you have another 1099-R to enter, press continue. You should be asked if this is a non-qualified plan, which a 457 is. Then you get a screen "These situations may lower your tax bill". The last box "other" is where you enter the 457 distribution amount to remove the 10% penalty (click the blue "learn more" link for an explanation.
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