Even though you don't owe a 10% penalty, you owe regular income tax on any withdrawal. That tax is calculated on your tax return in combination with any other income, deductions and credits you might have. Your ultimate tax could be anywhere from zero to 36%, depending on your filing status and other income. The 20% is withholding, like from wages, that goes to your credit at the IRS. Your actual tax is calculated on your tax return, and if you paid more withholding than your tax, you get a refund, and if you had less withholding than your tax, you owe an additional payment when you file your return.
