IRA Early Withdrawal

Forum|Forum|5 years ago
February 17, 2021
4 replies
9 views

I had an early withdrawal of an IRA for $7,581.

I paid $1,668 for Fed taxes.

I paid $167 for CA State taxes.

Before I added this amount in TurboTax my taxes due were $503 Fed, $55 CA State.

After I added this amount in TurboTax my taxes due increased to $1,261 Fed, $592 CA State.

I understand the Fed increase of $758 due to the 10% early withdrawal penalty.

I don’t understand the CA State increase of $537 since CA only charges 2.5% for early withdrawal. That amount should be $190.

Why did my CA State taxes increase to $537 ($347 higher than expected)?

AmyC

Level 15

It may have bumped your income to reduce some other CA credits your were receiving. For example, CA EITC is income based. You may have added enough income to drop the amount allowed some or completely.

There are more CA credits. See Credits | FTB.ca.gov - Franchise Tax Board

You may want to compare your return before and after to see what really changed.

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mhinchmnAuthor

Level 2

Thank you so much - that makes a lot of sense! I want to compare my return before and after so I can see the details of the changes but Turbo Tax wont let you see tax forms until you file. And, I don't want to file until l know what has caused this - UGH! Thanks, though - greatly appreciate you taking the time to answer my question.