If that creates the 10% penalty, you have to complete the the 5329 for the over 59 1/2 age exclusion.

I'm not 100% sure and too tired to look at a return, but I believe the software does cancel the 10% penalty calculation if the person is 60 as of Jan.1 for the tax year being filed. I remember looking for why there was no penalty on the return, before I remembered the client's age, on a 1099R, Code 1.