Why is TurboTax software calculating a taxable distribution on a back-door ROTH IRA conversion when there were no earnings between the contribution and conversion dates?

[beckys]

I opened a traditional IRA with a $6000 2021 contribution and the next day converted it to a ROTH IRA. There were no earnings in the contribution/conversion period, but TurboTax says $98 is taxable.

I did receive a $100 bonus for opening the traditional IRA (several weeks later) from the provider, and that $100 was still in the traditional IRA account through the remainder of 2021.

[fanfare]

Your $100 bonus put the kibosh on your back-door Roth conversion leaving you with a $98 taxable amount and a $98 total basis in your IRA.