Vacation pay

2 part question:  I  retired 2022 December  

therefore did not work 2023.   I received money for accumulated vacation backpay 

in early 2023 and  accompanying W2 form.    Do I enter as normal income or some other option available that might be lower tax rate?  And although I did not work my MAGI is over $135k for some reason therefore unable to take advantage of contributing IRA as tax deduction.  Why my magi so high when I did not work?