Yes, generally, if you inherit an annuity from your spouse, then you are "treating it as your own" and you transfer it over into your own name, ssn, etc. If you take withdrawals from your retirement plan before you are of retirement age, you will be assessed an "early withdrawal penalty" of 10% of the amount distributed on your return unless you meet an exception, which are listed at page 4 of the following link:
IRS Instructions for Form 5329
If this was a different type of plan that the payer said was not subject to 10% additional tax, then please contact the payer for a corrected Form 1099R.
