Waiting period penalty due to late payment from Employer 1099-MISC

Dear experts, I received a 1099-MISC with amount showing under "Other" as the last payment before I left the job was late.

TT Premier added it in  Part I -> Additional Income under "Other income"   (I chose "No, It didn't involve work like my main job." and "No, it didn't involve an intent to earn money".

Hope above is right.

I was wondering why this is increasing my federal tax due upon entering this amount, as it shows in Non-taxable income in my paycheck. Appreciate your advice. Thank you!