To confirm, you received Form 1099-R with code J (regular distribution)? If yes, then you would have to pay the 6% penalty on your 2021 return and then enter the Form 1099-R on your 2022 tax return which will remove the excess from your 2022 tax return. Please see How do I amend my federal tax return for a prior year?
Did you verify with your financial institution that you had earnings on the 2021 excess?
On your 2022 return:
- Login to your TurboTax Account
- Click on "Search" on the top and type “1099-R”
- Click on “Jump to 1099-R” and enter all your 1099-Rs
- Click "Continue" on the "Review your 1099-R info" screen
- Answer all the questions and make sure you enter the net contributions prior to 2022 on the "Enter Prior Year Roth IRA Contributions" screen
- On the "Do you have any Excess Roth Contributions" answer "Yes"
- On the "Enter Excess Contributions" screen enter the total excess contribution from 2021.
"For purposes of determining excess contributions, any contribution that is withdrawn on or before the due date (including extensions) for filing your tax return for the year is treated as an amount not contributed. This treatment only applies if any earnings on the contributions are also withdrawn. The earnings are considered earned and received in the year the excess contribution was made." (IRS Pub 590-A)
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