Retirement tax questions

No you cannot recharacterize a contribution for 2020 because it is after the due date of the 2020 tax return. For the 2020 contribution you will have to pay the 6% penalty for 2020 and 2021. 

You can either apply the excess contribution to 2022 (if your income is less) during the 2022 tax return interview or you can make a regular distribution without earnings or losses ($6,000) and report it on your 2022 tax return (enter Form 1099-R).

Next year on your 2022 tax return if you want to apply the excess as a 2022 contribution:

1. Click on "Search" on the top right and type “IRA contributions”
2. Click on “Jump to IRA contributions"
3. Select “Roth IRA”
4. On the "Do you have any Excess Roth Contributions" answer "Yes"
5. On the "Enter Excess Contributions" screen enter the total excess contribution from previous year of $6,000 (if it wasn't carried over).
6. On the "How Much Excess to 2022?" screen enter how much you want to apply to 2022.

For the 2021 excess contribution:

Yes, you are supposed to enter $2,200 since it states "Amount of the Contribution to be recharacterized, including earnings/losses". The note below confirms this as well.

You will enter the recharacterization when you enter the contribution to the Roth IRA on your 2021 tax return: 

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “IRA contributions” 
3. Click on “Jump to IRA contributions"
4. Select “Roth IRA”
5. Answer “No” to “Is This a Repayment of a Retirement Distribution
6. Enter the Roth contribution amount $6,000
7. Answer “Yes” to the recharacterized question on the “Did You Change Your Mind?” screen and enter the contribution amount $6,000 (no earnings or losses)
8. TurboTax will ask for an explanation statement where it should be stated that the original $6,000 minus $xxx.xx loss were recharacterized.
9. On the screen "Choose Not to Deduct IRA Contributions" answer "Yes" (if you are thinking about doing a backdoor Roth. If you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible)

You will get Form 1099-R  for the recharacterization with code R-Recharacterized IRA contribution made for 2021 and this belongs on the 2021 return. But a Form 1099-R with code R will do nothing to your return. You can only report it as mentioned above. Therefore, you can ignore the Form 1099-R with code R when you get it in 2023. The box 1 on the 1099-R will report the total recharacterized amount (contribution plus earnings) but it does not separately report the earnings and box 2a must be zero.