The rule does not apply to an IRA withdrawal which remains at age 59 1/2 unless the withdrawal is eligible for an exception to the 10% early withdrawal penalty. See IRS Tax Topic - https://www.irs.gov/taxtopics/tc557
The IRS Rule of 55 allows an employee who is laid off, fired, or who quits a job between the ages of 55 and 59 1/2 to pull money out of his 401(k) or 403(b) plan without penalty. This applies to workers who leave their jobs anytime during or after the year of their 55th birthdays.
If you are eligible you can withdraw funds from the 401(k) or 403(b) plan without the 10% early withdrawal penalty as long as withdrawal occurs during or after the year of your 55th birthday.
I took the money out while I was 54 but have filed an extension this year so I will be 55 before I file my taxes. How do I reflect that in turbotax so the 10% penalty does not apply? Do I need to request an updated 1099-R?
It is not about when you file your tax return--it is about how old you were when you took the money out of the retirement account. Having your birthday ahead of filing your tax return will have no effect on the early withdrawal penalty.
In other words, fd65, the age-55 exception does not apply to this distribution. Further, the age-55 exception does not apply to any distribution from your 401(k) or similar qualified retirement plan if you separated from service with the company before the year you reached age 55, as appears to be the case here.