You were not assessed an early withdrawal penalty on the 401(k) withdrawal. The fund administrator withheld federal income taxes for the withdrawal at 20% as is required for funds withdrawn from a 401(k). Any early withdrawal penalties will be assessed on your federal tax return. The early withdrawal penalty is 10% of the withdrawal if you are under age 59 1/2 and still working for the company. If you have separated from the company then the early withdrawal penalty is assessed if you are under the age of 55.
Your receive a Form 1099-R for the withdrawal. The federal income taxes withheld are reported in box 4 of the form and are entered on your tax return as a tax payment (just like from a W-2).
To enter a form 1099-R -
- Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Scroll down to Retirement Plans and Social Security
On IRA, 401(k), Pension Plan Withdrawals (1099-R), click the start or update button
Or enter 1099-r in the Search box located in the upper right of the program screen. Click on Jump to 1099-R
