How can I get a flag removed so I can be promoted?

This is a serious matter because if the flag remains in place you will not populate on the AAA and will not be eligible for a waiver to PFC and, if it remains in place long enough you will not be automatically advanced to PFC when you meet the TIS requirements. Talk to your squad leader who in turn should talk to the PSG, who in turn should talk to the 1SG to have the commander lift the flag.

If your first line leader doesn't assist you in the matter I would recommend using the open door policy for each level of your NCO support channel until the problem is resolved. If that fails call IG.

PV2 Frank Morter I advise you to go to your squad leader and explain the situation. This flag should have been lift especially if you have since passed a record and you are not overweight. At the very least find out why it has not been lifted. I failed a pt test in AIT but passed my EOC and was not flagged when I got to my first unit so that flag should have been lifted.

Eventually, you'll need to see the S-1 section with some documents...
But what jumps out at me is that your Sergeant does not seem to be aware of this issue. As a First Sergeant, I look at a FLAG report monthly (more if you count all of the slides I have to brief). I know darn well who my PT failures are, and a FLAG mismatch has its own line item in the report. It should have been fixed long ago.
Start with your Squad/ Team Leader and go from there. This should be an easy fix.