You can do it . refer to Pub590A pg 29.
... take appropriate corrective action within 6 months
from the due date of your return, excluding extensions.
For returns due April , 2024, this period ends
on October , 2024
Make sure to give the custodian the correct instructions.
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recharacterization: the original amount to the first IRA you report as contribution to the second IRA, earnings move but are ignored.
You must use a trustee-to-trustee transfer
You will instruct trustee to calculate the allocable earnings.
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The 3% is a complication.
It remains to be seen if the custodian will consider the 3% as earnings or not. You will find out one way or the other.
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The second step -conversion -, done later, goes on your 2024 tax return.
The second step only works if your Traditional IRA starts at Zero.
you will have to amend 2023 to attach form 8606 showing non-deductible election.
You'll still have to pay tax on the 3% at conversion, if you want a reset situation allowing more backdoor roths.
@PAccisano
