What is a key feature of the tax withholding amount from a distribution?

The correct answer highlights that the tax withholding amount from a distribution is based on the total amount of distributions subject to taxation. This means that the withholding is calculated by considering the nature and size of the distribution being taken. The IRS provides specific guidelines for how much tax should be withheld from retirement account distributions, primarily based on whether the distribution is an eligible rollover or subject to mandatory withholding.

This option accurately reflects the reality that the required withholding can vary depending on the total distribution amount, rather than being a simple flat percentage or influenced directly by factors like employment status or annual salary deductions. Each distribution may involve different levels of taxation, particularly if it includes pre-tax and post-tax contributions, thus impacting how much is withheld.