Excess contributions from 529 plan to Roth IRA

[v64checks]

My father accidentally rolled over more money than my earned income as part of 529 Plan Rollover to my Roth IRA. We tried to roll back the transaction but Fidelity said the funds were already deposited into my Roth IRA. Since I don't have enough earned income, the additional funds are considered as excess contribution and TurboTax also said I should take them out our pay 6% penalty. I checked with The 529 Plan folks and they said they cannot take the excess money back into the Plan. What are my options to avoid paying taxes and 10% penalty as this would considered as non qualified distribution. I am still in school and can use those funds for this years tuition but I am not sure how to report that in TurboTax/my Tax forms. The 529 Plan folks say I wont be getting a 1099-Q this year but they will send one next year. How will I explain all of this next year to IRS? I am so confused and dont know what to do with this situation. Any help and guidance is much appreciated.

PS I am cross posting this question to the Education forum as well. 

[Hal_Al]

Contact Fidelity. They should be able to return the excess contribution. It's a common thing. A 1099-R will be issued for the distribution.  Any earnings will be taxable. 

Q. What are my options to avoid paying taxes and 10% penalty as this would considered as non qualified distribution?

A. None. You had 60 days to put the money back into the 529 plan to classify it as a rollback/rollover and not a distribution. 

Q. I am still in school.  Can I use those funds for this years tuition?

A. No. Technically, the distribution year must match the  year the educational expenses were paid. See: https://ttlc.intuit.com/community/college-education/discussion/i-took-a-529-distribution-in-2021-for...

Q. But I am not sure how to report that in TurboTax (TT)/my Tax forms. 

A.  You enter the 1099-Q. Report the Roth rollover as a trustee to trustee rollover. That page in TT does not specifically mention Roth, but that is the entry point (they're working on a fix).. TT will report the remaining amount as a taxable distribution (a portion of the earnings, inbox 2, will be taxed and penalized).