Form 8606 keeps track of "nondeductible IRAs" back in the day when a high income limit disallowed a deduction. Then it's a convoluted calculation, as a ratio out of the entire balance, not just a pure subtraction.

This, on the other hand, is excess because client didn't have sufficient earned income to contribute more than he earned. Now I'm thinking that the software is considering the excess to be a sort of return of funds that were previously withdrawn from the IRA, returned within the same tax year, hence a pure deduction. What do you think?