@Kuhn - the only time there is a penalty is if you are under 59.5 years old. What is the code in Box 1?
otherwise, you pay the regular income tax. There is no way out of this.
Now, if you can demonstrate you were impacted by COVID, you can take up to $100,000 and stretch out reporting the income over 2020, 2021 and 2022, which spreads out the tax impact.
Note that even if you take advantage of this 1/3 is still taxable for 2020.
does that help?
