10% penalty is what you should expect with a early withdrawal under 59 1/2.
Here is some additional information that may be of value.
It was a little easier to withdraw money from your retirement account if you were out of work or needed cash in 2020. Normally, if you withdraw money from your IRA, 401(k) or other employer-sponsored retirement account before the age of 59½, you must pay an early withdrawal penalty.
The CARES Act temporarily waived the 10% early withdrawal penalty on up to $100,000 of withdrawals. To qualify, you had to have been diagnosed with COVID-19 or experienced financial troubles due to the pandemic, such as job loss, quarantine, furlough, reduction in hours, the closing of your business or lack of childcare.
Although the CARES Act waived the 10% penalty, the withdrawals are still taxable as ordinary income. You can spread the taxable income over a three-year period or include the full distribution in your taxable income for 2020. You can also put the money back into your retirement plan within three years and undo the tax consequences by filing an amended tax return.
If you took a retirement account withdrawal in 2020, look for Form 1099-R from your financial institution around the end of January 2021. You’ll need to report the amounts shown on 1099-R when you prepare your 2020 tax return.
