Help! Did a backdoor Roth, now Turbo Tax says I have a Roth IRA Penalty for Excess Contribution

[p4ssionfruit]

Hello everyone! I cannot figure out how to enter in my information for this. 

In 2020 and 2021, I made contributions of 6k to my Traditional IRA. This year, I decided to do a backdoor Roth and moved the entire amount over to my Roth IRA. The total on my 1099-R Form reads $14,700.

Info I entered:

1. Total 2021 traditional IRA contributions: $6000

2. How much of $6k you contributed to traditional IRA for 2021 did you switch or "recharacterize" - $6000

3. Any excess IRA contributions before 2021? - NO

4. Any nondeductible contributions to IRA from 2020 or prior years? - NO (is this correct? I'm not sure if it should be a YES but I've never had any 8606 form.

5. Did you make any Roth IRA contribution for 2021?

Then I get "Your income is too high to contribute. Your MAGI puts you over the current Roth Limit of $140,000. That means the $6000 you put into a Roth is considered excess contribution.

Next page says I currently have a penalty because of my excess contribution. 

How do I fix this since I converted both my 2020 and 2021 Traditional IRA contributions into the Roth IRA this year?

Thank you!

[ErnieS0 · Accepted solution]

A recharacterization is not a conversion. A recharacterization means you contributed to one type of IRA but changed your mind and decided you really wanted to contribute to another type of IRA. This is a do over.

A conversion means you contributed after tax money to a traditional IRA and then moved (converted) that money into a Roth (two steps–contribution and conversion).

You also made a $6,000 contribution for the 2020 tax year so you should say you made a nondeductible contribution for 2020 or prior years and enter $6,000.

Follow these steps: How do I enter a backdoor Roth IRA conversion?