@Coilylecross wrote:
is there a way to go back and pay the penalty after you've already taken the withdrawal?
All the taxes and penalties are figured on your income tax return. Any tax you have withheld is only an estimate -- if too little was withheld, you will pay more when you finish your tax return, if too much was withheld, you will get the difference as a refund.
On your tax return itself, you will report the 1099-R and you will be asked if this is a qualifying distribution under the CARES act, you will answer yes or no and the tax and penalties will be figured accordingly.
If you think that you will not certify this as COVID related, then you will owe regular income tax plus a 10% penalty. Since you said "we" it sounds like you are married, your income tax is probably in the 15% bracket or it could be the 22% bracket. That would mean a total tax of 25% or 32%, or about $6300 or $8000. If you had less than that withheld, and want to make an estimated payment now so you aren't in the hole on April 15, you can make a payment to your account at www.irs.gov/payments. Be sure to select "2020 estimated tax" as the reason for the payment. When you prepare your tax return, be sure to list the estimated payment and the date in the tax program. You will get credit for the payment and your ultimate refund or tax bill will be determined. (Note that if you usually get a refund of $3000 and your tax situation didn't;t change, you might only need to make an estimated payment of $3200 or $5000 to square up.)
You can use the TaxCaster or the IRS withholding calculator to estimate your tax that will be due.
https://turbotax.intuit.com/tax-tools/calculators/taxcaster/
https://turbotax.intuit.com/tax-tools/calculators/tax-bracket/
https://www.irs.gov/individuals/tax-withholding-estimator
