Yes, the earnings will be included in your taxable income and if you are under 59 1/2 then you will have to pay the 10% early withdrawal penalty on the earnings.
Since you made the contribution to the Roth IRA in 2021 but it counted as a 2020 contribution, and withdrew the contribution in 2021 you will get a 2021 1099-R in 2022 with codes 8 and J. You will report all of it on your 2021 tax return. You do not need to create a 1099-R for 2020. You only need to create a 1099-R with code P and J if you made excess contributions in 2020 that you withdrew in 2021.
Please see IRA reporting: Excess contributions for additional information.
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