Due to coronavirus relief, if you withdrew money from your retirement plan or your IRA in 2020, you are not required to pay the 10% additional tax if you are under 59 1/2.
Here are a couple of options:
- Choose to pay the tax on your withdrawal over a three-year period, one third each year or pay tax on the entire distribution in 2020.
- A three-year repayment option repaying your distribution beginning the day after the date you received the distribution and it will be treated as though it was a direct rollover, therefore not taxable.
For more information https://www.irs.gov/newsroom/coronavirus-relief-for-retirement-plans-and-iras