dmertz
Level 15

Retirement tax questions

Yes, TurboTax is correct.  An unfortunate consequence of being in the phase-out range for a Roth IRA contribution is that the taxable earnings indeed increase your MAGI resulting in an additional excess contribution.  You can obtain a return of the additional $10 excess contribution (plus perhaps some slight additional amount to account for the earnings on the $10 that will add a bit more to your MAGI), or you can just pay the $1 penalty and resolve the $10 excess in 2020 by either applying the $10 as part of your 2020 Roth IRA contribution or by obtaining a regular distribution of $10 after October 15, 2020 but before the end of 2020.

 

To make a more precise guess at the amount to have returned you can estimate the investment gain on the $10 and add that to the $60 you've already entered.  After a few iterations the result will converge.