You can recharacterize the contribution. That will make it a Traditional IRA contribution, and you won't be penalized for that.
You then convert the balance in the Traditional IRA to a Roth.
- You need to recharacterize the Roth contribution today. The Traditional IRA contribution will be on your 2016 tax return
- If you decide to convert the Traditional IRA to a Roth, that will be reported on your 2017 return (you can't convert for 2016 in 2017)