"we identified that she made excess contributions of $3475 in 2020, $4475 in 2021, "
return of excess contribution:
after tax due date including extensions: you distribute the excess amount being carried forward on Form 5329,
(or offset it with currently allowed contribution) .
Any allocable earnings stay in the Roth account.
"We withdrew $3475 plus gains (2020 excess) .. in May"
This is incorrect procedure, after tax return due date, allocable earnings stay in the Roth.
Custodian should not have allowed it if you used the correct forms.
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