Definition of «penalty tax»

A penalty tax is an extra fee or charge that is imposed by the government as punishment for not following certain rules or laws related to taxes.

But there's a 10 % federal penalty tax on withdrawals of earnings. (investor.vanguard.com)
But there's a 10 % federal penalty tax on withdrawals of earnings. (investor.vanguard.com)
But in addition to the tax you will pay at your regular marginal tax rate, you will also pay an additional penalty tax of 20 %. (moneysense.ca)
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