The excess was an excess elective deferral. Because you maxed out the elective deferral at your W-2 employer, you are ineligible to have made any elective deferral to the solo 401(k), leaving only the employer matching contribution as the amount that you are eligible to have contributed to the solo 401(k).
When entering your solo 401(k) contribution into TurboTax in the self-employed retirement section, it would probably be safest to just enter the net amount contributed (original amount contributed minus $25) as a SEP contribution since this will cause TurboTax to limit your deduction to just the amount of employer contribution permitted and enter the $25 (and the $3 of earnings) nowhere. If you instead enter the net contribution in the box for employer contributions to an individual 401(k), TurboTax will not enforce the employer contribution limit under these circumstances.
Given that Fidelity returned the contribution along with $3 of gains in 2024, the $3 will be reported on your 2024 tax return.
