The part in blue is the probability that when
In this case you need to work with the region in the tails of graph of the normal curve.
The 0.5% to the right of 99.5% added to the first 0.5%
constitutes the 1% region in a 2-tailed situation,
or the first 1% or last 1% (9% to 100%) constitutes the 1% region
in a 1-tail situation.