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Actually, please disregard question. I see that there's a notation on TurboTax that their system isn't ready to handle this scenario yet. "You'll need to revisit this area. The IRS instructions related to disaster distributions weren't ready in time for us to include them in this release. Please revisit this area later."
I missed this section where is located?
and when will this section be updated?
It depends. According to this IRS link, "The distributions generally are included in income ratably over a three-year period, starting with the year in which you receive your distribution. For example, if you receive a $9,000 coronavirus-related distribution in 2020, you would report $3,000 in income on your federal income tax return for each of 2020, 2021, and 2022. However, you have the option of including the entire distribution in your income for the year of the distribution." So yes the distribution is taxable income but that taxable income can be spread over a three-year period.
With this said, IRS does waive the early withdrawal penalty for taking the distribution early but you will not see that in your return until IRS releases form 8915. At this time, the release date is unknown but check this link for periodic updates.
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