Excess is not the same as distribution, and you stated the taxpayer isn't taking the excess out, anyway, so no distribution. Although, they can change their mind and do so up to 6 months after the due date of the return.

If this also was invested, there are reportable taxable (and excise tax) for the earnings attributable to that excess, even though the excess won't be deducted for 2024.

Look at the penalty form 5329.