It is coded correctly.

I don't use ProConnect so I can't tell you the specific how-to, but:

You need to indicate it was converted to a Roth.

The client said it was a Backdoor Roth, so that indicates he also made a contribution to a Traditional IRA.  Be sure to enter that non-deductible Traditional IRA so the software knows there is "Basis".

Hi @chapguy19 
Thanks for posting your question! This may help:

Backdoor Roth IRA Entry in ProConnect - MFJ
If you need further assistance with this we would reach out to ProConnect Support, as they can best help with your specific situation.
Looking forward to seeing more of your contributions in the community!

The issuer of the 1099-R is responsible for reporting the money Out. They don't necessarily know, nor are responsible for, what happened next. They don't have anything to do with the reporting for the end result, just the facts they are responsible for. If someone under 59 1/2 took out money, that is code 2. Exception applies means someone preparing the tax return will be responsible for the due diligence and reporting of that exception.

That's you. You'll be entering the basis, and confirm that there are no other pre-tax, deducted, or never taxed funds in any Trad IRA, SIMPLE IRA, SEP IRA or rollover Trad IRA. Otherwise, this isn't a backdoor, it's a pro-rata conversion.