1. Unfortunately, penalty applies for full year if not withdrew before due date.
2. Earnings must be included in income in the year the excess or non-deductible contribution was deposited into your IRA. See below IRS link for more info. Looks at highlighted part.
"If you timely filed your return without withdrawing the excess contributions, you can still make the withdrawal no later than 6 months after the due date of your tax return, excluding extensions. If you do, file an amended return with “Filed pursuant to section 301.9100-2” entered at the top. Report any related earnings for 2024 on the amended return and include an explanation of the withdrawal. Make any other necessary changes on the amended return (for example, if you reported the contributions as excess contributions on your original return, include an amended Form 5329 reflecting that the withdrawn contributions are no longer treated as having been contributed)."
https://www.irs.gov/instructions/i5329#en_US_2024_publink13330rd0e1314:~:text=the%20entire%20balance...
I hope this information was helpful!
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