How come the federal income tax witheld isn't being deducted from the taxable amount/gross distribution?

[BillM223]

What is your federal withholding? Remember to check your W-2, 1099s, and other income forms. Is this the amount from line 25d on your 1040?

What is your total tax (line 24)?

Note that all the income amounts are added together, deductions are removed, your tax calculated and THEN your withholding is subtracted.

[SteamTrain]

i.e. it is deducted from the final taxes assessed...it is not deducted from your gross distribution.

Just like W-2 pay....the gross is added to income......the withholding is eventually used in the final steps where it is applied against the eventual calculated tax assessed.