Tax withholding is simply a down-payment on whatever tax liability is calculated on your tax return. It doesn't apply to any particular item of income. Regardless of how much was withheld for taxes from your IRA distribution, your tax liability is not determined until you prepare your tax return. Whatever amount appears in box 4 of the Form 1099-R is credited on your tax return on Form 1040 line 16 to be subtracted from the overall tax liability determined on your tax return.
