The 10% early withdrawal penalty is assessed on your federal tax return and entered as a tax liability. Any taxes withheld from the distribution will be entered in box 4 of the Form 1099-R that you will receive in January 2021 for a distribution in 2020. You report the Form 1099-R received on your federal tax return, Form 1040.
The taxes withheld will be entered on your federal tax return as a tax payment.
To enter, edit or delete a form 1099-R -
- Click on Federal Taxes (Personal using Home and Business)
- Click on Wages and Income (Personal Income using Home and Business)
- Click on I'll choose what I work on (if shown)
- Scroll down to Retirement Plans and Social Security
- On IRA, 401(k), Pension Plan Withdrawals (1099-R), click the start or update button
Or enter 1099-r in the Search box located in the upper right of the program screen. Click on Jump to 1099-R
