While the income was spread over 3 years, the 20% tax withholding taken in the first year did not.
The withholding would have been used in the calculation of your tax refund/balance on your 2020 return.
When you input the 1/3 that is being reported as income in 2021, you're seeing the result of the income tax on that amount (but you should not see the penalty - so refer to the schedule mentioned above for where to look to be sure it is not there.)
