Our 1095A was for only 4 months, we were Also penalized because it says we earned more money than we quoted. Why is IRA withdrawals considered earned income.

IRA withdrawals are not considered to be earned income.  However, when you are giving an estimate of your income at the marketplace, you are giving an estimate of your household income.  Household income includes nontaxable income as well as IRA withdrawals, unemployment, and social security. 

Please click here for a definition of what income is included in household income as well as examples of household income.