First of all, if you made the withdrawal after January 1, 2020, from a qualified retirement plan such as an IRA or 401(k), the penalty is waived due to the COVID emergency.
Then, whether you owe a penalty or not, any withholding taken at the time of the withdrawal is only an estimate. You must enter the withdrawal on your tax return from the 1099–R form. The money will be added to all your other income and your overall tax will be calculated, including a penalty if you owe it. Then, you get credit for the amount withheld along with your other job withholding or tax payments. If you had too much withheld, you will get a refund, and if you did not have enough withheld, you will owe an additional amount.
