When I withdrew from my 401k in June 2020, doing so because the early withdrawal penalty was being waived and covid was affecting my employer's business and I was facing huge hour cuts and layoffs, the amount I withdrew was assessed an 18% tax. I withdrew $33,348.03 and $6,002.64 was taken off the top, leaving $27,345.39 to be deposited into my checking account. When I filed my tax return, and answering the questions about a Qualified Disaster Distribution, it was stated to me that it qualified and the early withdrawal penalty was waived, but that I owed more taxes. Not thinking to question it, I filed and chose the option to spread my tax debt over 3 years.
My problem is this: If I was taxed that 18% upon the withdrawal to begin with, why am I being taxed again upon filing?
