Help: Roth IRA conversion penalty

I followed all the steps but was surprised I need to pay penalty annually for the backdoor Roth IRA conversion. Below are my steps.

  1. Sign in to your TurboTax account
  2. Open your return if it’s not already open
  3. Select Federal from the menu, then Deductions & Credits
  4. Locate the Retirement and Investments section and select Show more
  5. Select Start or Revisit next to Traditional and Roth IRA Contributions
  6. Check the Traditional IRA box and select Continue
  7. Answer Yes to the question, Did you Contribute To a Traditional IRA?
  8. Answer No to the question, Is This a Repayment of a Retirement Distribution?
  9. On the screen, Tell Us How Much You Contributed, enter the amount (6000) contributed and select Continue
  10. Answer Yes on the screen Did You Change Your Mind?,.

After that, I put "Your IRA Explanation Statement", No for "Any Excess IRA Contributions Before 2024?", "Yes" to "Any Nondeductible Contributions to Haifeng's IRA?" and 0 for Total Basis of 2023-12-31

 

What surprised me is that the money I put to Roth is considered excess contribution and need to pay penalty of 6% each year if the money is not returned to traditional IRA. Yes, my AGI is slightly above the 240000 limit, but I thought this is what backdoor Roth IRA is for. 

 

Thank you for your help.