dmertz
Level 15

Retirement tax questions

I can't see your tax return, but I assure you, it's not.  If TurboTax was treating the entire amount as taxable, it would also be reporting the entire amount as being subject to penalty.  The entire gross amount is "income" in that it must be reported on your tax return, but only the taxable amount of $1,565 is appearing on line 4b of Form 1040.