The question was about a traditional IRA distribution, not a Roth IRA distribution. An early IRA distribution is one made before age 59½ and is subject to both income tax and to a 10% early-distribution penalty. The 10% penalty is an excise tax, not an income tax. The EV tax credit does not reduce liability for excise taxes, only income taxes.
In your example, the income is falling in the 24% tax bracket, not in the 22% tax bracket. The $2884 of tax liability from the $12,000 distribution adds to your overall income tax liability and the EV tax credit is subtracted from that overall income tax liability but cannot be used to reduce your income tax liability below zero. The $1,200 penalty is added to that result to determine your overall tax liability (income tax plus excise tax).
