I'm a resident of NC. I left my job for medical reasons and withdrew what I had in my 401k---I received a form 1099-R showing total distribution of $8319. Federal taxes deducted $1663 and state $333.00. My question is: When I file my tax returns, will this $ get taxed again or can I get some type of credit?. thanks

The $1663 is a sort of down payment for taxes and penalties that you owe because of the withdrawl. When you do your taxes you include the $8319 on line 16 of Form 1040 as "pensions and annuities," so it gets added together with your other sources of income and ultimately included in your adjusted gross income. You include 10% of the withdrawal amount - or $831.90 - as early withdrawal penalty on line 58, and finally include the $1663 on line 62 as taxes already withheld. Whether you will end up owing more than was already withheld is impossible to say without a lot more information. Also - if your sate has an income tax you will need to investigate whether and how to include the withdrawl on your state tax return. Since no taxes were withheld for your state, it's possible that you could owe $400 or more in taxes on the withdrawal (depending on your state's income tax rates).