If you worked in Indiana, it is Indiana income and does not have to be reported to Kentucky. The location of payer of the 1099-NEC does not matter if you did the actual work in Indiana. Can you clarify why you are filing the Kentucky return?
As an Indiana resident, you do not automatically get a refund of estimated taxes paid- you still have to report the income to Indiana and the estimated payments are applied to any taxes owed.
Yes you would have to pay the penalties and interest of you did not make the estimated tax payments to Kentucky- but note, self-employed are treated like normal employers with regard to the reciprocity agreement- so you could file and pay in Indiana only.
I do not think you have to change your 2021 tax returns, but if you do, just follow these steps to amend: How to File an Amended Tax Return with the IRS - TurboTax. The entries after you set up the amended returns are similar to your entries for this year.
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