"has the distribution code as "1" which forces a 10% penalty."

You enter the 1099-R  as you see it. You use the program to mark the option that this is waived due to qualifying. Then, you address if they want to include it all in the tax year or take it over 3 years, which is the form 8915-E that isn't available, yet.

You don't enter a code not on that form.