<prompt> Human: Hi, please let me know if theres a better sub for me to post this on!My summer job from my teens had a mandatory percentage of each paycheck go into a retirement account. Now that I am no longer at this job, I am choosing to withdraw the balance of that account, rather than transfer it to a new retirement account. The account is through PARS public agency retirement services. They state that early withdrawal has a federal tax penalty of 20 in addition to state income tax, so that amount will be withheld before it is dispersed to me. However, everywhere I have looked online says that the federal tax penalty is only 10. I dont know neaIs there something Im missing, or does PARS actually have the penalty rate incorrect?  <response>: Youll be taxed on it at whatever your ordinary tax rate is and youll have a 10 percent penalty on top of that. The provider has to withhold 20 percent from the distribution - thats not the penalty amount 