Simple IRA withdrawal for higher education

[JonP1969]

I took an early withdrawal from a Simple IRA and entered 100% Higher Education.  Turbo Tax is telling me I still have to pay the 10% penalty....  However, according my my research... Both traditional and Roth IRAs allow you to withdraw money for qualified higher education expenses before age 59.5 without incurring the 10 percent early withdrawal penalty  

[ThomasM125]

It shouldn't be subject to penalty. I replicated your entry, using code 1 in box 7 and indicated that it was an IRA distribution and I wasn't subject to the penalty. It is possible you didn't check the box indicating it was an IRA distribution (next to box 7 on your Form 1099-R). If you didn't do that, it would not be exempt from penalty as it has to be an IRA distribution.

[JonP1969]

I double checked everything and it still says I owe 10%.  I do have the box next to box 7 checked.  This is really bad as I won't be able to use Turbo Tax if they're going to claim I owe an extra $912.   I don't see what else I could possibly change... In the one large check box screen I choose "Simple IRA with more than 2 years of participation" as the only selection.  Distribution code 1, box for IRA/SEP/SIMPLE checked.  I then enter 100 in Higher Education.

Here's the full text, maybe I have a chance once I finish adding my data... Also, is there a way to manually override this $912 amount? 

Good News:  Your tax bill just got lower 

For the info you just entered, we were able to reduce the tax...

Based on your entries so far, your extra tax bill is $912 or 10% (25% for Simple IRA) of the money you took out that didn't get used for a special situation.  This number may change as you add more data to your return.

One last thing... right after Turbo Tax asks about this point, it asks if I took a previous Disaster Distribution before 2024.  I did take a distribution during the 2020 covid emergency.  Does that count?  I answered yes.  Not sure if that's complicating my 2024 Higher Education topic.  I declared 1/3 of the 2020 distribution in 2021, 2022, and 2023, so it should have nothing to do with my 2024 Higher Education withdrawal.

[JonP1969]

Never mind - I figured it out.  I entered 100 thinking it was 100% of my withdrawal.  I needed to copy the full dollar amount over.  Sorry about that.  Thanks for the help.  Once I fixed it, it said I owe no penalty.