Excess ROTH Contributioon 2021 $3630,paid penalties each year ,2025 1099R coded "T" How to tell IRS it was for excess removed in 2025(I'm 66y/o) and not pay more penalty?

[MaryK4]

STEP ONE Enter the 1099-R 

1. Go to Federal > Wages & Income > Retirement Plans and Social Security and click Start/Edit next to IRA, 401(k), Pension Plan Withdrawals (1099-R).
2. Enter the 1099-R exactly as shown with Code T in Box 7.
3. On the "Owned Any Roth IRA for Five Years?" screen, select Yes.
4. On the "Enter Prior Year Roth IRA Contributions" screen, enter your total historical net contributions. Include the $3,630 from 2021 here so TurboTax knows you are withdrawing "basis" (contributions), which makes the distribution tax-free. 

STEP TWO Remove the penalty

1. Go to Federal > Deductions & Credits > Retirement and Investments and click Start/Edit next to Traditional and Roth IRA Contributions.
2. Select Roth IRA.
3. On the screen "Do you have any Excess Roth Contributions?", answer Yes.
4. On the "Enter Excess Contributions" screen, enter the $3,630 as the carryover amount from 2024.
5. On the next screen (the "penalty" screen), enter $3,630 in the box for "amount withdrawn in 2025" (or "amount withdrawn by the due date").

[dmertz]

STEP 2 is not to be done in this case because STEP 2 only applies for a return of contribution before the due date of the tax return for the year for which the excess contribution was made.

TurboTax will automatically include the gross amount on line 20 of your 2025 Form 5329 to be subtracted from the excess on line 18, eliminating the excess.