? I retired at age 50 from a state agency and went to work at a private company. I receive a monthly check from my retirement. Taxes are withheld and I get a 1099-R. Tax software says I owe a early withdrawal penalty on my retirement. Is this correct?==============> In order to discourage people from using their retirement savings for anything other than retirement income, the IRS charges a penalty of additional tax on most early withdrawals from retirement plans.In general, an early distribution, or early withdrawal, is any money you take out of a qualified retirement plan before you reach the age of 59 1/2., A Traditional IRA or a Roth IRA, a 401(k), a 403(a),however, state or local government 457 plans are not considered qualified retirement plans and early distributions from these are not subject to a federal tax penalty though there may be state penalties.
If so, will this occur every year until I?m 59 1/2?===========>no; if you take a lump-sum , then it could trigger significant tax consequences. you will owe money when you file your return
unless you meet one of the early withdrawal exceptions, If you make an early withdrawal from a qualified retirement plan, the amount is added to your gross income. The tax penalty for an early withdrawal from a retirement plan is equal to 10% of the amount that is included in your income. You must pay this penalty in addition to regular income tax