I withdrew money from 401k and the reasoning says it’s not taxable but on the next screen it shows it being taxed is this a software issue

[pakistansapm]

The money was withdrawn from an annuity for Death purpose. The software clearly states that portion is not taxable but on the next page it shows that it is taxable so I am not understanding 

[Ashby · Accepted solution]

If you withdraw early from a retirement account such as a 401k, there are exceptions so that you avoid the 10% penalty on early withdrawal. However, the distribution will still be taxable as ordinary income. This is the same as if you took it out in retirement.