Long story short: I purchased a home and my lender was atrocious at communicating dates and details. With 24 hours to spare, I was informed they needed my down (which was supposed to come from a loan I was going to get against my former employer's 401K), so I was forced to close the account in order to meet the deadline. (My investment company otherwise needed 15 days to process.)
When you take a premature distribution form an IRA or pension plan, you pay both tax and a penalty of 10%.The 20% already paid covers your 10% penalty and whatever portion of your tax that falls into the 10% bracket of taxable income. Rarely does this cover all the taxes since you probably are being taxed at a higher rate than 10%. There are possible exemptions to the penalty in the link below. You may possibly be able to take advantage of one of them.
When you take a premature distribution form an IRA or pension plan, you pay both tax and a penalty of 10%.The 20% already paid covers your 10% penalty and whatever portion of your tax that falls into the 10% bracket of taxable income. Rarely does this cover all the taxes since you probably are being taxed at a higher rate than 10%. There are possible exemptions to the penalty in the link below. You may possibly be able to take advantage of one of them.