Incorrect 1099-R, marked as Distribution Code 1 "early withdrawal" when it really was a rollover to another qualifying plan. Until I can get this corrected, what do I do?
If you "rolled over" the money within 60 days of receiving it, then you can indicate in the 1099-R interview that you rolled it over to a qualifying IRA. This will remove the tax and the penalty.
After you enter the 1099-R (please enter all fields as they are shown on the 1099-R), continue the interview. You will come to a screen entitled "What Did You Do With The Money From [the name of the place on your 1099-R]". On this screen, check that "I moved the money to another retirement account".
Then indicate whether you rolled over some or all of the money.
If you "rolled over" the money within 60 days of receiving it, then you can indicate in the 1099-R interview that you rolled it over to a qualifying IRA. This will remove the tax and the penalty.
After you enter the 1099-R (please enter all fields as they are shown on the 1099-R), continue the interview. You will come to a screen entitled "What Did You Do With The Money From [the name of the place on your 1099-R]". On this screen, check that "I moved the money to another retirement account".
Then indicate whether you rolled over some or all of the money.
The code 1 indicates that this was an indirect rollover, meaning that the money was distributed to you and you subsequently rolled the money over to another retirement account, rather than a direct rollover paid directly by your old plan custodian to the new plan custodian. As TurboTaxBillMc said, indicating in the follow-up that you rolled over this distribution will cause TurboTax to exclude the distribution from your taxable income and therefore not subject to penalty.