Last year my balance on my 401(K) was less than $1000 when I changed my job and fidelity issued me a check and withheld tax. I received 1099-R. Why should I pay penalty?

[mashhadi18]

I was in a company for a short term and I paid 401(K) out of my paycheck. When I left that company and joined another company, my balance was less than $1000. Fidelity sent me an email saying if your balance keeps less than $1000, it will be against their minimum balance role and will issue me the total balance after tax.
I received the check and deposited it on my checking account. Now, I received a form 1099-R and I have to pay penalty due to pulling the money out from my 401(K) before I reach out the retirement age.
Since Fidelity withdrew the money not me, why should I pay 10% penalty?

[JohnB5677]

With a limited number of exceptions, any distribution from a 401-K to a person under the age of 59 1/2 will incur the 10% penalty.  As a general rule, the 401-K administrator (Fidelity) would have sent you some communication informing you that you had the option to move your 401-K into a personal IRA.  However, they are not required to do that.  Unfortunately, you have no recourse other than to pay the 10% penalty.