I had to dip into my retirement due to covid last year..I already had the 10% tax withheld prior to avoid getting the payment. Do I still have to pay another 10%?

[cherokeequeen54]

According to TurboTax on my 1099-r I still owe another 10% after I already took care of the first 10% ,375.19, prior to receiving my money. The only option that wasn't in the choices for a tax break was because I was trying to pay my monthly bills. Why should I have to pay twice?

[VolvoGirl]

Is it giving you the extra 10% early withdrawal penalty?  You can probably avoid that but I don't know how to enter it for Covid-19.   You might also be able to spread the tax over 3 years.  

And you didn't pay the tax.  You had tax withheld like from your wages.  You still have to enter the whole gross amount (before taxes were withheld) with your other income to figure out the total tax (and it may put you into a higher tax bracket) and then the withholding is subtracted from the total tax to figure your refund or tax due. The Gross amount shows up on 1040 line 4a or 5a and the taxable amount on 4b/5b. The withholding will show up on 1040 line 25b.

[macuser_22]

Withholding is like estimated tax.    The actual tax depends on all your income and your marginal tax bracket at the time you file.     If you are under age 59 1/2 and also have a  10% early distribution penalty then the withholding will only pay the penalty, not the tax.  If yiu are in the 24% tax bracket then you should have had about 35% withheld.

[fanfare]

To avoid the 10% early withdrawal tax you must state you were affected by COVID-19.

This should be a true statement.