I believe what happened is you overcontributed to your IRA for 2021 and withdrew the extra funds in 2022. If so, you would have received a Form 1009-R for 2022 that reported the distribution. However, only the earnings which would have been reported in box 2 on the 1099-R form would be taxable. The code "P" in box 7 on the form would tell the IRS that the distribution belongs on your 2021 return and the taxable amount would be the earnings. As such, the distribution would not affect your 2022 return, so it does not need to be amended.
On your 2021 return, I assume you reported the correct IRA contribution so you wouldn't need to amend it for that, but you may have not reported the earnings, which are probably minimal. So, you could amend your 2021 return and pay the tax on the earnings if you did not do that originally. But since the tax is likely minimal, it may not be worth the trouble.
As far as the state is concerned, they should only be taxing the earnings on the distribution and they should apply that to 2021. Again, the income is likely minimal, so the tax should be as well. You should respond to the state notice and explain what happened and ask them for guidance on what they need to correct the tax they have assessed you.
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