Sounds like you nailed it.  I appreciate you posting your findings.

FWIW, In ProSeries you would enter the 1099-R with the code P in 2020 and scroll down a little to check a box that says something like "2021 1099-R w/code P for 2020".  Then everything magically works.  In Lacerte/PTO I would use your approach and just code it to what gives me the desired result.  Taxable income + penalty.  Job done, move on.

Some people prefer to wait and amend once the 2021 1099-R code P shows up 13 months later.  I'm always proactive, often on the phone with the IRA custodian & client getting the actual numbers that the custodian will be reporting under which codes in the future years.  But more often than not, I'm the one who discovers that there's been an excess contribution so I try to follow through since many clients are not even going to understand what needs to be done.  Since we're talking about Bill Murray films today, I'd rather avoid a Lost in Translation situation. 🙂

Rick