I invested $100K (After-tax) into an annuity. It grew to $120K in 2024 and I withdrew $10k. Do I still have to pay an early withdrawal and get taxed on the $10K?

[MaryK4]

If you are under retirement age, you would have to pay the penalty for early withdrawal for the taxable portion.  The taxable portion would be applied proportionally to the account, with your initial investment not taxed.

[dmertz]

When your receive a nonperiodic distribution from a nonqualified annuity, taxable gains come out first, investment in the contract last.  In this case, that means that the entire $10,000 was a distribution of taxable earnings.  If you are under age 59½, the taxable amount is subject to a 10% early-distribution penalty and I would expect that box 7 of the Form 1099-R would contain codes 1 and D.