Yes, you can use the cost of the tuition. For the purposes of the 10% additional penalty exception, higher education means costs of tuition, fees, books, supplies and equipment to a post secondary school (college, university, vocational schools) eligible to participate in a student aid program administered by the U.S. Department of Education. It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) post secondary institutions.
Once you enter the 1099-R, the program will ask you about exceptions to the 10% penalty.
Remember, the distribution is still likely taxable, but there will be no 10% penalty.
