The Blades won 5-3 on penalties after keeper Mark Howard had saved the third home spot-kick from Andy Welsh.
Sheffield made six changes from the team beaten 1-0 at home by MK Dons on Saturday and gave a debut in midfield to deadline day signing Florent Cuvelier from Stoke City.
They faced a Scunthorpe side that gave a full debut to former Sheffield Wednesday winger Etienne Esajas and a first start to striker Jimmy Spencer, on loan from Huddersfield.
A lacklustre first half was punctuated by only the occasional threat at goal.
Callum McFadzean had the best two chances for the Blades. First he tested Scunthorpe keeper Sam Slocombe with a raking long range shot.
Then, 10 minutes from the break, he should have done better when he blazed over after a strong run to the edge of the box.
At the opposite end the home side went closest when a looping close range shot from Spencer was tipped over at full stretch by Howard.
Howard was also in action early in the second half doing well to keep out a close range effort from Sam Winnall, denying the Scunthorpe striker his fourth goal of the season.
But neither side could find their finishing touch as the game went to penalties. Neil Collins, Jose Baxter, Conor Coady, Lyle Taylor and McGinty all scored from the spot for the Blades while Deon Burton, Andy Dawson and Terry Hawkridge replied for Scunthorpe.