Please be aware, if you do not take out the excess amount by April 15th (the following year, so in your case 2021), then you are taxed twice on the excess deferral left in the plan. This happens once when you contribute it and again when you receive it as a distribution. You can't include the excess amount in the cost of the contract even though you included it in your income. Please see Pub 525 for details.
To confirm, they issued you 2020 Form 1099-R with code 8 without any distribution? And this 2020 Form 1099-R was reported on your 2020 return (since it was a 2020 excess)?
Generally, you will include the excess deferral in the year the excess was made as wages. If you receive it before April 15th of the following year then are done. But if you receive the excess after April 15th then you will have to report the distribution again. Therefore you are taxed twice. This is the penalty for not removing it in time.
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