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Xyz409
Returning Member

TurboTax Not Removing 10% Early Withdrawal Penalty Even After Reporting a Qualified Disaster Distribution

I've reported an early IRA distribution and also designated it as a qualified disaster distribution (non-covid) but TurboTax does not remove 10% early withdrawal penalty.

 

I've reported the same 1099-R on both FreeTaxUSA and TaxAct and neither of those programs are charging me the 10% penalty, only TurboTax is.

 

Can this be fixed?

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1 Reply
MarilynG
Expert Alumni

TurboTax Not Removing 10% Early Withdrawal Penalty Even After Reporting a Qualified Disaster Distribution

If you took an early retirement plan distribution in 2021, don't indicate it was a Disaster Distribution.   That applies to distributions taken in 2019 or 2020 (or 2018, 2017). 

 

You may qualify for a Penalty Exception.

 

 

 

@Xyz409

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