CA Non-resident early withdrawal tax

[jgarcia4988]

Backstory, I am active duty military and my wife worked for JP Morgan Chase. She worked in our home of record state of Texas for 5 years and in California for 3 1/2 years. We needed to use the money when she left for another company last year so we did a complete balance early distribution. $1,200ish was withheld for CA taxes. It seems as if maybe the 2.5% early distribution fee for the state of CA is being applied to our return on Turbo Tax. 

Do I owe any penalty for early withdrawal of 401K to California? I would think since we are non-residents that no tax or penalty would be owed to California 

[ThomasM125]

Since the income came from work performed in California it is California sourced income, so taxes and penalties would apply to it just as if you were a California resident.

[jgarcia4988]

From what my return looks like so far, the taxes didn't apply just the penalty. So is it different for taxes vs penalty? 

[AmyC]

Yes. The entire distribution becomes part of your taxable income and is taxed at your income bracket. Then, there is a penalty added for taking it out younger than 59 1/2. The penalty is 10% federal and 2.5%% CA. Moving forward, these will help keep you on track:

• TaxCaster tax calculator
• Tax bracket calculator

[Rambler4This]

If you click on the button that says "I have distributions not subject to additional tax" you'll be able to see the radio-button for "Distribution received while living in CA? yes/no".

If you were a resident of CA during part of the year than some is likely due to CA.  If you were a non-resident for the *entire* year; my semi-uneducated option, its unlikely some is due CA.