You must file a 5329 form for each year that there was an excess in the IRA. The excess has a 6% penalty reported on the 5329 that repeats each year that the excess remained in the IRA - then means that the 2017 excess has a 2017 6% penalty, a 2018 and 2019 penalty. Since the excess was removed before the end of 2020 there is not 2020 penalty.
Since the penalty must be paid, and earnings can stay in the IRA and do not need to be withdrawn.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
