Hello:

When calculating 401k early withdrawal penalty tax (10%), is it after or before the first 20% federal income tax?

In other words, if the lump sum is 100k, tax is 20k. Is penalty 10% of 100k (10k), or 10% of 80k (8k)?

Thanks,

D

The 10% penalty is on the total amount of the withdrawal. The 20% is just withholding against tax liability, just like the withholding from your paycheck.