If you owe on the return then the total withholding from all sources was not enough to cover the total tax bill ... the 1099-R distribution is not taxed in a bubble. It is added to your other income and then the total is taxed and the 10% penalty is added to the federal taxes. So if you are in the 25% fed tax bracket + the 10% penalty then you would owe 35% on that distribution and the 20% withheld would not have been enough. As already mentioned review the entire return ... look at the form 1040 for the distribution in the income section and the withholding in the payments section.... did you enter everything correctly ?
