You have to be Tier 3 verified for USD.
https://support.kraken.com/hc/en-us/articles/216435347-Domestic-US-Deposit-and-Withdrawal

That caused me to investigate the reason why, so I ran into this post -

Basically it looks like if you live in the US and don't have a steady income (say you make all your money in crypto or ad revenue and don't have a normal job) - then their third payment processor Synapse won't let you withdraw fiat currency.