After looking at this again, it seems that TurboTax's calculations on the forms are now automatically applying whatever amount of excess Roth IRA contributions carried into the current year that its possible without having any entry on line 26 of the IRA Contribution Worksheet, making line 26 obsolete and flagging an error if any entry is made there. However, I think that step-by-step mode is still asking how much to apply and filling in line 26, so there is a bit of a disconnect between the operation of the forms and the operation of step-by-step mode unless that's been resolved since the last time I looked at it. I'm not sure when TurboTax was changed to not use the entry on line 26, but the version of 2019 TurboTax I checked behaves the same as 2020 TurboTax.
The problem with the current implementation is that it's not treating the application of the excess as a current-year contribution as a contribution that qualifies for the Retirement Savings Contributions Credit.
If one would not qualify for the Retirement Savings Contributions Credit anyway or has at least $2,000 of other retirement contributions that would be used in the calculation of this credit (or the individual simply doesn't want to qualify for this credit), one can get around the error by simply deleting the line-26 entry.
(Apparently this behavior is the result of an ill-conceived fix to the problem I reported years ago where treating the excess as a current-year contribution was duplicating the basis. Had they implemented the fix the way I had suggested in that problem report, they would not have created this new bug. The fix I suggested was to continue to apply the excess as the current-year contribution as they had been doing, but also reduce the contribution basis by the amount applied, canceling out the duplication of basis.)
