Took 39,000 from 401 under cares act. i had 30% withheld. says i still owe, and its a lot. what happened?

[SweetieJean]

The form to handle this won't be available on TT until the end of the month.  Please come back then.

But be aware that any increase in income can also lower or eliminate certain deductions/credits.

[JeffreyR77]

It depends.  The CARES Act allowed you to take a distribution from your 401(k) this year and not be subject to an early withdrawal penalty. 

Additionally, a provision of the law allowed you to spread the taxation of the distribution evenly over 2020, 2021, and 2022. 

You can check your entries for your 1099-R to verify you marked you took the money  out for a qualified disaster (including COVID-19):

TurboTax is expected to have Form 8915-E for the 3 year tax averaging component in place by the end of the month.  

[fanfare]

if you choose not to spread the tax over three years, you can efile now and it will zip through approval.

BUT you still need to wait to have the 10% penalty  resolved by TurboTax if that is showing.

[fanfare]

if you do spread it over three years, you'll get  lot of that 30% tax withheld back.