I contributed $5000 to an ira for tax year 2006. In 2008 IRS disallowed the deferred tax on that amount because I was covered by an employer plan. I've since paid both federal and state tax on the $5000.

I now want to withdraw the $5000 tax and penalty free. What forms need to be filled out?

Talk to the custodian of the IRA about making withdrawals. You can make withdrawals if you are over 59-1/2, or if you meet certain hardship crireria. Otherwise you will have to pay the 10% early withdrawal penalty. If you do make a withdrawal, you will owe income taxes on the portion of the withdrawal that is attributable to either pre-tax contributions or the tax-deffered earnings in the account. Unfortunately you can'y just say that the $5K you want to withdraw is the after-tax $5K that's in the plan - per IRS rules the withdrawal is considered to be split between both pe- and after-tax portions.