You should not be paying State taxes with your income tax if you did a early withdrawal from your 401k .There are fees that is taken when you early withdraw from your 401k . Depending on what State I live in N.Y.C
The IRS assesses a 10% penalty tax in addition to regular income taxes if you take a distribution from your 401k prior to age 59½. There is, however, an opportunity to withdraw penalty-free savings from your 401k at age 55.
Depends on your state of residency, you may pay state income tax on 401K withdrawal?
"Because payments received from your 401(k) account are considered income and taxed at the federal level, you must also pay state income taxes on the funds. The only exception occurs in states without an income tax. Your 401(k) plan may offer you the opportunity to have taxes automatically withheld from a withdrawal." Below is an answer to some of the States tax.
All this info from TurboTax Pro....the question was about local or municipal taxes... is a 401k distribtion prior to age 59 taxable under local taxes. Maybe a different question... Is a retirement distribution, which has been pentalized by federal and state, also included as other taxable income on local tax forms?