Because you missed the deadline, your excess contribution for 2022 is required to have been reported on 2022 Form 5329 (and as a nondeductible traditional IRA contribution on Form 8606 and the 6% penalty paid. If you did not, you must amend 2022 to include this.
When entering the code-7 2023 Form 1099-R into 2023 TurboTax, enter a zero in box 2a instead of the same amount as is in box 1 and be sure to mark the IRA/SEP/SIMPLE box. Also proceed through the IRA contribution section and make sure that you indicate that you made an excess contribution for a year prior to 2023 and that you obtained a distribution of this excess after the due date of the tax return for that year (2022 in this case). This will prompt TurboTax to treat the distribution as a nontaxable distribution of basis in nondeductible traditional IRA contributions and will cause TurboTax to prepare 2023 Form 5329 showing that the excess carried in from 2022 has been eliminated by this distribution. However, it appears that TurboTax fails to properly reduce your basis by the amount of the distribution of the excess after the due date of the prior-year tax return, so you'll need to adjust that yourself.
