Is it considered income and how do I account for the penalty in my taxes, where MetLife penalized me for early direct rollover to a bank IRA.

I closed my MetLife account early, aware they would  penalize me, 35K to be exact.  Now I want to take a deduction from another IRA that  I know it will be considered income.  If the MetLIfe 35k is income, I will be over my income limit for Social Security.