Roth IRA excess contributions

[macuser_22]

That's correct.  Once you pay the 6% penalty then any earnings can remain in the account.

(In fact some people take advantage of that.  For example if the excess contribution result in a 15% earnings then it would pay to just pay the 6% penalty and leave the earning alone.)

[butimnotachef]

@macuser_22 thanks for your reply on this! I'm in the same boat and got a 1099-R in 2021 as I pulled out excess contribution March 2020 for contribution made in 2018. The 1099-R only has code J and doesn't have code P because the excess was removed too late. 

But when adding the 1099-R it immediately made the amount owed this year increase which I am very surprised about. My understanding is this amount shouldn't be taxed as a normal distribution b/c it indeed was an excess removal. How is one suppose to indicate this was an excess removal so 1/ turbotax doesn't continually think I owe the 6% fee each year (when I started my tax this year it just default said I owed that much) 2/ that isn't taxed as income?