Where in Turbo tax do you indicate that the rule off 55 applies to avoid the 10% penalty. I have searched and can find nothing.

Yes, there's an exception to the early withdrawal penalty if you took your early distribution from your employer's retirement plan because you left your job after age 55. Follow this link for more details about this exception. 

If this applies to your situation, enter your 1099-R, and then enter the exception:

1. Sign to your TurboTax account.
2. Select Other Tax Situations.
3. Select the down arrow to the right of Additional Tax Payments.
4. Select Start to the right of Extra Tax on Early Retirement Withdrawals.
5. Answer the first few questions according to your situation.
6. When you get to These Situations May Lower Your Tax Bill, enter the amount of the distribution to the right of Separation From Service the Year During or After Age 55 (Age 50, If a Public Safety Employee).
7. Continue with your tax return. 

I called and found you need to not do any extra steps. The Turbo Tax help informed me of this and if not correct, someone owes an explanation. I tried to follow these steps and no pathway led me to these steps provided.

What code is in box 7 on the 1099R?  Are you showing the 10% Early Withdrawal Penalty on schedule 2 line 8 which goes to 1040 line 23?

2

A 1099-R with code 2 in box 7 only needs to be entered into the program. The code 2 tells the program that there is an exception with no penalty. See Table 1. Guide to Distribution Codes. Had it been code 1, you would need the extra steps.