Where are you entering it? It goes in as a 1099R and is taxed as regular income, not as Capital Gains. Although an increase in income will change the tax on any capital gains overall. It should work the same in reverse.
Are you using the Desktop program and the What-If worksheet? You can check a box to use the 2024 tax rates. Then to see the tax calculation you need to look at the Qualified Dividends and Capital Gains Tax worksheet.
There are like 7 different ways to calculate the tax.
It depends what kind of income you have. Even though the full amount shows up in the total income on the 1040 line 7, if you have capital gains or qualified dividends the tax is not taken from the tax table but is calculated separately from Schedule D. The tax will be calculated on the Qualified Dividends and Capital Gain Tax Worksheet. It does not get filed with your return. In the online version you need to save your return as a pdf file and include all the worksheets to see it.
