For 2023 you will still pay the 6% penalty since the excess wasn't removed by December 31, 2023 unless you are able to make Roth IRA contributions for 2023 and contributed less than your allowed amount. In this case, you can apply the excess as a 2023 Roth IRA 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 2021 (if it wasn't carried over).
6. On the "How Much Excess to 2023?" screen enter how much you want to apply to 2023.
But when you enter the the distribution on your 2024 return the excess contribution will resolve because the penalty is calculated as the smaller of the excess contribution or the value of your Roth IRAs on December 31, 2024 (including 2024 contributions made in 2025). Therefore, you won't have to pay the 6% in 2024 since your Roth IRA will be empty.
[Edited 4/14/2024 | 7:16am PST]
@Dave C11
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