Why is Turbotax showing that I took an early retirement withdrawal from my IRA if I am over 59 1/2? I am 64 and it keeps me under the heading of an early withdrawal.

[SweetieJean]

First, be sure your Date of Birth is correct in the Personal Info section.  Second, what is the Distribution Code in Box 7 of the 1099-R?

[VolvoGirl]

And if you are married maybe your spouse is  under 59 1/2?    Be sure to enter the 1099R under your name.  

[polster1]

I double checked the birth dates and they are correct. The code in box 7 is "7" for two of them and "8J" in one other.

[polster1]

Yes, that is the case but they are entered correctly. We did double check that. Thanks!

[VolvoGirl]

Did you try deleting all 1099R and re enter them.

[dmertz]

Even though you are over age 59½, the code J which normally indicates an early distribution is needed on the code 8J Form 1099-R to identify this return of contribution as coming from a Roth IRA.  In the case where you are over age 59½, to eliminate the penalty you must claim an Other reason exception to the penalty on Form 5329 equal to the amount in box 2a of this Form 1099-R.

[polster1]

Only one of the 1099R statements were from a Roth and was a small amount. The larger amount was from a traditional IRA and did not have code J. It had code 7. I haven't heard anything back from TurboTax as to whether or not the issue has been solved, but because I am over 59 1/2, the automatic response should not pop up that I am taking an early withdrawal.

[dmertz]

There is nothing wrong with TurboTax with regard to this.  The code J used to identify the return of contribution as coming from a Roth IRA, but it's your responsibility to identify it as having been received after reaching age 59½ and to claim an Other reason exception to the penalty on the taxable amount shown on this code 8J Form 1099-R.

(Yes, TurboTax developers could theoretically add functionality to the program to check the age of the recipient to be able to recognize that the distribution was made to someone over age 59½ and to automatically populate the Form 5329 claiming the Other reason exception, but I doubt that will ever happen.  In the past they tried to implement the penalty exception for the use of a distribution for medical expenses and they goofed that up enough that they quickly took that functionality back out.)