I received a hardship withdrawal from my 401k for education expenses and had federal and state taxes and penalties withheld.

[michaeledwardmoo]

I paid a 10% tax at the time of distribution to both federal and state, why did the turbo tax increase my federal taxes due when I included it.

[xmasbaby0]

The tax withheld from your 401k withdrawal was only an estimate of tax owed.  If it was an early withdrawal you are subject to a 10% penalty; the money you took out is also subject to ordinary income tax when combined with your other income.