Did you enter a 1 code in box 7? And fill in taxable amount in box 2.

Already done that, code 1 in box 7 and the taxable amount in box 2. The taxable amount still didn't flow to line 1 of Form 5329. My product updates are all current, too.

Is the penalty  calculating on the 1040?

The whole penalty amount for the early distribution was calculated and is reflected on Schedule 2 of the 1040. The exception amount for First Home Puchases(Line I on Form 5329-Distributions Not Subject to Additional Tax Smart Worksheet = $10,000.00). The taxable amount of the early distribution on Line 1 of the Form 1099-R worksheet does not flow to Line 1 of Form 5329(Early distribution included in income). This is needed to calculate the amount subject to additional tax(Line 1 minus Line 2 = Line 3) . Then, the additional tax would be reflected on line 4 flowing to Schedule 2(which is less than the penalty amount for the whole distribution). Is this correct?

It worked for me.

How did you do it? Is there something in the 1099-R worksheet that I need to do(like check/click) so the info will flow to the form 5329? Thank you ever so much for your help. I really appreciate it. 

ALOHA

What was the problem?

Your solution may help some other folks.

I was working on a return for a married couple filing jointly. The 1099-R was the spouse's and I did not check the box on the 1099-R worksheet. It worked after I have checked the box. Again, thank you so much. I really appreciate your help.