I took a withdraw from an old pension to assist in home purchase. Are there any ways to reduce tax payment on these funds?

[MargaretL · Accepted solution]

No, there isn't a way to reduce tax payment, unfortunately.

Pensions are considered taxable income subject to your ordinary income tax.  If pension is taken out before you reach the age of 50 and 1/2, they are subject to an additional 10% penalty tax; home purchase doesn't qualify for an exception to the 10% penalty.

More information on 10% penalty exceptions:

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-tax-on-early-distri...