The actual tax and any penalty resulting from the distribution is not known until you prepare your tax return. Just like withholding from your paycheck, any amount withheld for taxes (Form 1099-R box 4) appears on Form 1040 line 64 or Form 1040A line 40 as a credit to be subtracted from the tax calculated on your tax return, reducing your balance due or increasing your refund. State taxes are handled similarly.
If your balance due increases or your refund decreases after properly entering a Form 1099-R, it simply means that the amount of the distribution withheld for taxes was less than the actual tax liability determined on your tax return.
