When you enter the Form 1099-R into your return reporting the distribution from the IRA, there will be a series of follow-up questions. If you are being penalized for an early distribution, one of those questions will show you a list of exceptions to the early distribution penalty. Enter the amount of the distribution that was spent for qualified education expenses in the box for that category and the penalty will be eliminated or reduced.
To learn more, see the following TurboTax help article:
Are there exceptions to the early distribution penalty on an IRA?
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