To resolve the non-coplanar issue in AutoCAD when trying to fillet or extend/trim a line, ensure that the drawing entities are on the same layer and in the same z-axis plane. Use the layer editor to verify layer alignment and type "list" in the command line to check the attributes of the entities involved. If they are on different layers or planes, adjustments will be necessary to align them. This will enable successful editing without encountering the non-coplanar error. Properly managing layers and z-axis positioning is crucial for seamless operations in AutoCAD.