I have this same question, and it doesn't seem like yours was answered (or I'm just dense, which is probably the case).
The question as I see it is "why am I being assessed a 10% penalty on TOP of the 10% I withheld when I made the distribution? It seems like this person (and me) are actually being assessed 20% - 10% on withdrawal, and 10% on tax filing.
Example: in 2024, let's say I early withdraw $1,000, and say I want to withhold 10% federal, so I receive $900. This IMO has already effectively paid the "penalty", no? Now in 2025, when I go to pay my taxes on this, I am being penalized ANOTHER 10%. That, to me is 20% total. $100 when I withdrew, and $100 "penalty" when I pay taxes.
Put another way, if I had opted out of that 10% withholding on withdrawal, and when I go to pay tax, will the penalty be $100 or $200? Thanks! I'm sure I am just missing something here.
