When entering the 2025 Form 1099-R, enter a zero in box 2a of TurboTax's 1099-R form instead of the $7,000 that should be present in that box of the Form 1099-R provided by the payer. After entering this Form 1099-R, click the Continue button on the page that lists the Forms 1099-R that you have entered and proceed through the steps until TurboTax asks you to provide and explanation of this corrective distribution of the excess after the due date of the 2021 tax return. Nothing will about this will go on your 2025 Form 8606. No adjustments to basis are needed, nothing on a 2021 Form 8606 either. You explanation statement suffices and will be included with your filed 2025 tax return.
