Rule of 55 exception to the 10% Additional Tax penalty for early withdrawals from 401(k)

[flyinhigh]

I left the company in 2021, at age 57, and I took a withdrawal from my 401(k) in 2022.  I imported the information from Fidelity (the 401(k) management company). 

I cannot see how this withdrawal is treated in TurboTax to confirm that it is NOT subject to the 10% Additional Tax penalty.  I looked at form 5329, but didn't see anything about this withdrawal on that form.

How can I confirm that this withdrawal (before age 59 1/2) is treated properly in TurboTax and not subject to the 10% Additional Tax penalty?

(and... thank you for your help!)

[VolvoGirl · Accepted solution]

After you enter the 1099R and keep going it should ask you if you have any exceptions.   What code is in box 7 on 1099R?  The 10% Early Withdrawal Penalty is on Schedule 2 line 8 which goes to 1040 line 23 so look on line 23.  I'll have to look but there should be a way to visit the penalty section like after you are done with deductions it will ask.

I wouldn't import the 1099R.  It might come in wrong.  I manually enter mine.

[DoninGA · Accepted solution]

On the Form 1099-R you received for the withdrawal the code in box 7 of the form should be a 2 indicating —Early distribution, exception applies (under age 59½).

[flyinhigh]

There *IS* a 2 in Box 7 of the Form 1099-R.  Thanks!

[flyinhigh]

There is a 2 in Box 7 of the Form 1099-R.  Thank you for the details about where to find Early Withdrawal Penalty (on Schedule 2).

I can't figure out how to get to a place, in TT, where I can enter the 1099-R.  When I search for 1099-r, the 'Jump to link' doesn't show up in the search results and when I click on the 1099-R button, it takes me to an answer outside of TT (and I also can't figure out how to give feedback to Intuit about that problem).

[DoninGA]

@flyinhigh

To enter, edit or delete a form 1099-R -

Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Scroll down to Retirement Plans and Social Security
On IRA, 401(k), Pension Plan Withdrawals (1099-R), click the start or update button

[flyinhigh]

Thank you for all the helpful replies!

I was able to follow the help in navigating to the 1099-R in TurboTax, too.  🙂