I received a 1099-R for a 401k distribution due to the plan's failing nondiscrimination testing. Box 7 has code 8. Is this distribution subject to the additional 10% tax?

Distributions due to filing nondiscrimination testing are not subject to the 10% additional tax (early-distribution penalty).  If box 7 does not include a code 1, TurboTax will not treat it as being subject to the 10% additional tax.

Company 401(k) failed 2019 discrimination test and refunded amounts in 2020.

1099R Box 7 has code 8.   TT shows it as nontaxable.  My administrator tells me it is

But TT is treating the entire distribution as non-taxable

---

@1215Michigan wrote:

But TT is treating the entire distribution as non-taxable

 

---

The taxable amount in box 2a would be subject to tax.