The penalty is not tax deductible. Taxes paid by you, and not reported to you on some other document such as a W-2 or 1099-MISC/R/INT or other form will be entered under the Deductions & Credits tab in the Estimates & Other Taxes Paid section, when you get to it.
You enter all this on the federal return, and the program will ask you for "ALL" taxes paid to "ALL" taxing authorities. Then when you get to your state return, the program will automatically carry over taxes paid to the state, to that state return, and will not ask you about them.
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