Only the part that is considered earnings will be taxed as ordinary income. The part of the distribution that is comprised of your contributions will not be taxed. So, if your contributions are $5,000 and your policy earned income of $1,800, then the $1,800 would be included in your ordinary income.
If you have no other taxable income for the year, then it would not be taxable as it would be below your standard deduction which for 2024 would be $14,600.
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