Are you the same person that asked this same thing, here:

https://proconnect.intuit.com/community/proconnect-tax-discussions/discussion/client-spread-2020-dis...

My answer there:

The 3-year carryover from a 2020 covid-related distribution will be reported on Form 8915-F, which hasn't appeared in an update, yet.

The penalty waiver for first time home buyer for early withdrawal is Form 5329.

https://www.investopedia.com/articles/personal-finance/110415/can-you-use-your-ira-buy-house.asp

You can use your covid money for anything you want, but that doesn't change the distribution rule it fell under. Spending it on a home has nothing to do with tax reporting for the three-year rule. And, the disaster provision for a home in 2021 has nothing to do with disaster provisions in 2020.

For this: "They used some of the money to put the down payment on a house in 2020 and then when the house was complete in 2021, want to get the exclusion."

Then amend 2020 and refile it, showing the $10k house separate from the Balance as covid distribution. Now that balance is split over 3 years.

Read that article; it will help you determine if they finally qualify under this new concept.