I just was charge 20% federal and 20% state tax to take out my 401k early. I live in NJ is this right? I thought it was only 20% all together.

Not sure about the state tax, but 20% is the standard withholding when you do an early withdrawal from an IRS or 401K.

Please note that it is NOT ENOUGH to cover your tax liabilty for that early withdrawal.

That tax liablity, when you factor in the 10% Early Withdrawal Penalty and state and federal income taxes, could hit 50%, depending on your tax bracket and in which state you live.