The early withdrawal penalty is 10% of the amount withdrawn, not 20%. In addition to the penalty, you have to pay income taxes on the amount, at the rate corresponding to your total taxable income.
Tax withheld is just an estimated advance payment of your taxes. The final tax amount can only be determined when you fill out your tax return. The taxes withheld serve as a credit against your tax liability. If too much tax was withheld, you'll receive a refund; otherwise, there'll be a tax due.
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