Turbo Tax does not give me an option to waive this per my employment status and as a result says I owe money. Exemptions: Department of Education, City University of New York, District Attorneys' Offices, or New York City Housing Authority (or NYC Housing Authority or Transit Police transferred into the New York Police Department).
Where do you live?
Does your W-2 from the Department of Education have any Section 1127 wages or 1127 tax in box 14?
I don't understand why you think TurboTax is forcing you to file Form NYC-1127. On the New York credits and taxes screen you don't have to click the Start button for NYC-1127. Just click "Done with Credits" and proceed through the rest of the New York return. If you do click Start for NYC-1127, the first screen asks "Do you need to complete Form NYC-1127?" If you answer No it accepts that answer and you can just proceed.
If you still feel that you are being forced to file Form NYC-1127, please post specific detailed information about the steps you are taking in TurboTax, how you are answering each question, and the exact word-for-word message you are getting from TurboTax that prevents you from skipping the NYC-1127. If possible, post screen shots, but omit or remove any personal information. This is a public web site.
Hoping someone else can pick up this thread.
I also am a DOE employee and am exempt. I am in the same situation as the initial poster. There is now a NYC1127 form for me to print and file. I used the TurboTax links to determine I was exempt. I can't recall the exact buttons I pushed as per the response, but if I knew I was exempt I wouldn't have said I needed to complete this form. I most likely hit continue or done or whatever the prompt is.
Do I still have to file it?
You do not have to file the NYC-1127. Just ignore it. It does not affect anything else, so it doesn't matter if it's in your TurboTax file. If you e-file your New York state tax return the NYC-1127 will not be included. If you print your New York return to file by mail, don't include the NYC-1127. Either don't print the NYC-1127 pages, or shred them if you already printed them.
In the future, it's better to post a new question with all the details of your specific situation instead of tagging on to an old thread.