Capital One is a provider.

What sort of Account was this?

It's an allowable subtraction. Check the instructions.

It is regular bank interest income. There should be no penalty calculated.

The penalty is showing up on Schedule 1 line18. Which then flows to Adjustments to income line 10 on the 1040.

Interest income is in Box 1. There is no entry in box 2.

Go back and look at all your Sch B entries.  Worst case scenario, delete Sch B and let it regenerate and re-enter your figures.

I have no entry in box 2. But an amount is showing on Sch 1 line 18.

I even deleted the line on my input and entered the Capital one Interest in box 1 with no entry in box 2. Still the penalty is showing on Sch 1.

Click on the QuickZoom button next to line 18, it will take you back to the point of origination.

Did that and it took me back to my Capital One line and the empty box 2.

I deleted the entire sch B and did not put any entries in the worksheet. The penalty is still on 1040!

Just found it. It is coming from Sch K-1 input. 

The quick zoom took me back to interest income worksheet and not the K-1 worksheet where the penalty amount was flowing from. Got it now.  Thank you everyone!

Enter on 11. Interest. fORM 1099-INT. "other" .