The ordinary income tax portion can't be waived. After you enter the 1099-R, you will be asked some folllow-up questions where you can indicate if you qualify for a penalty exemption.
Most retirement plan distributions are subject to income tax and may be subject to an additional 10% tax. Generally, the amounts an individual withdraws from an IRA or retirement plan before reaching age 59½ are called "early" or "premature" distributions. Individuals must pay an additional 10% early withdrawal tax unless an exception applies. Click this link for the list of exceptions - 401Ks exceptions are in the first column.
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