No, TurboTax won't calculate the 6% penalty for your excess traditional IRA contribution because it is following the rule to use the smaller of the excess contribution or the value on December 31, 2023 (including contributions made for 2023 in 2024). Therefore, you won't have the 6% penalty calculated since your value in the traditional IRA is $0.
You converted the excess traditional IRA contribution to a Roth IRA which was an invalid conversion and therefore you created an excess in the Roth IRA. But TurboTax cannot calculate the 6% penalty on this since this calculation is only triggered by the entry of an excess contribution in the Roth IRA contribution section.
Therefore, you cannot get the 6% penalty calculated with TurboTax on your 2023 return.
I would double check with the financial institution if you can withdraw the excess contribution plus earnings from the Roth IRA. Explain to the custodian that $500 of the conversion is disallowed since it was funded by an excess contribution. If you cannot withdraw it as an excess contribution you should at least request the excess amount plus earnings as a regular distribution.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
