The actual taxes withheld and paid on your early withdrawal (box 4 of Form 1099-R) may not be sufficient to cover the income tax when you take all of your income into account. Therefore, you may owe some additional income tax that was not expected. The fact that your balance due is the same as the amount that was withheld from your early distribution is a coincidence.
The amount withheld in box 4 is added to any other withholdings reported in your return, such as income tax withholdings from your W-2 income. This total amount withheld goes toward paying your Federal income tax and any 10 % early distribution penalty that is added to your return.
Even though you may not have had state income taxes withheld from the early distribution, the distribution amount will be included as income (unless specifically excluded by your state) and it will be included as the overall state income tax calculation. Any state tax withholdings from any source will help to reduce the taxes owed.
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