1099R Box 7 Code 8 is this subject to penalty

[sportnut1963]

My employer took out too much in my 401k plan.  They went $535.02 over.  They said I would have to submit a 1099R this year. 

The 1099R has arrived.  I see tax was taken from this amount.

In Box 7 of my 1099R I have a distribution code of 8.  I am younger than 59 years old.

Am I subject to a 10% penalty or a 30% penalty for early withdraw from my 401k plan even thought this was my employer's mistake?

Is Code 8 in Box 7 subject to any penalty (1099R).

Thanks,

[dmertz]

The distribution is not subject to penalty but the amount shown in box 2a is subject to ordinary income tax at your marginal tax rate.  Whatever was withheld for taxes may or may not have been sufficient to cover this additional tax liability.  The tax withholding is applied as a tax credit on Form 1040 line 64 or Form 1040A line 40 and any balance due or refund will be determined on your tax return as a whole.