@curlytwotoes
This is the key,
For 2026, I plan to do backdoor Roth IRA contributions as well since my income likely will not drop below the maximum allowable amount. However, since I am doing the backdoor Roth conversion, even if I were to contribute $6000 (instead of the max of $7000) to my Traditional IRA and convert it to my Roth, it would not count because as you said "the unused limit will not flow to the Roth IRA section of form 5329." Meaning I'd still be paying the excess 6%.
If your income is above the Roth contribution limit, then your contribution limit for a Roth IRA is zero, no matter how much or how little you contribute to a traditional IRA. In other words, even though most people have a combined limit of $7000 that can be split between a traditional and Roth IRA, you do not. Your contribution limit is $7000 for a traditional IRA and zero for a Roth IRA. And that, in turn, means that there is no way to contribute less than your Roth limit in order to absorb the prior Roth excess contribution. Meaning you will pay the 6% penalty on the $1000 prior excess contribution every year until you withdraw it, or your income drops below the Roth contribution max.
