It does seem high but you do not say what your income is. $7,437 ÷ $23,000 is 32%. There is a 32% tax bracket for married couples earning $326,601 to $414,700.
It is also possible the 10% penalty is appearing on your return because Form 8915-E is not final. At this point and time the Form 8915-E (Qualified 2020 Disaster Retirement Plan Distributions and Repayments (Use for Coronavirus-Related Distributions)) is not finalized.
The 8915-E Form is projected to be e-fileable starting 02/24/2021.
Please sign-up here and we will email you once the form is live.
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