What is the tax penalty for an early distribution from a simple IRA?
An early distribution from a SIMPLE IRA received within 2 years from the date you started the plan is subject to an additional tax (penalty) of 25%. These distributions are in boxes 1 and 2a of your Form 1099-R with code S in box 7. TurboTax calculates the penalty automatically. You can avoid all or part of the additional tax if you have an exception. Click the ‘Done with Deductions’ button and enter the amount on the exception interview screen.