See my comment above. TurboTax is indicating that the *additional* tax (the penalty) is 10%, but this is separate from the increase in your income tax liability resulting from this distribution. There is no way for the payer to know how much your income tax liability is; that's not determined until you prepare your tax return. The 10% withheld by the payer was simply the default tax withholding required by law, essentially a down-payment toward the overall tax liability calculated on your tax return.
