Roth IRA early distribution

[msehein]

I am under 59 1/2 and took an early Roth IRA distribution to pay for my daughter's college expenses in 2020.  The code on my 1099R is J.  Turbo tax, on my federal return, has the line for "if code 2 or 5 is listed..." checked, is that because i said it was for college expenses with code 2 being qualified?  It is not showing the distribution as being taxed.  Then for my PA state return, I don't even see a line for 1099R (my husband had a RMD from his deceased father's acct that is taxed for federal).  Then, I go to file my local taxes and I enter both mine and my husband's 1099R's and i get an error that no state tax was withheld and that it has to be bc it's not a qualified distribution.

My distribution is not taxable for fed, state or local, right?  Local doesn't ask any questions, just requires the info from the 1099R so I can't explain it was for college.  What can I do to get my local to file?  Do I just not enter it at all since it's not taxable?

[ColeenD3]

It may or may not be taxable. It depends to what degree you withdrew contributions.

You can always withdraw contributions (but not earnings) that you made to your Roth IRA tax and penalty free at any time. Additionally, the Ordering rules for withdrawals from a Roth IRA are: first from regular contributions, then from Conversion and rollover contributions, on a first-in, first-out basis and finally from Earnings on contributions.

Please note: A qualified distribution from a Roth IRA is tax-free and penalty-free, provided that the five-year aging requirement has been satisfied and one of the following conditions is met:

• Over age 59½
• Death or disability
• Qualified first-time home purchase

A non-qualified distribution is subject to taxation of earnings and a 10% additional tax unless an exception applies. For Roth IRAs, you can always remove post-tax penalty contributions (also known as "basis") from your Roth IRA without penalty.

Code J means an early withdrawal where the 5-year holding period is not met and there is no known exception. The earnings are taxable and without an exception, a 10% penalty applies.