@BrittanyS thanks for the feedback. based on reviewing IRS publication 969, it states:
Page 8 regarding excess contributions:
"If you fail to remain an eligible individual during any of the testing periods, discussed earlier, the amount you have to include in income isn’t an excess contribution. If you withdraw any of those amounts, the amount is treated the same as any other distribution from an HSA, discussed later."
I am confused on how to interpret this. it sounds like the money isn't classified as excess contributions, so I can simply withdraw early and count as other income in the 1040, however if it's "treated the same as any other distribution from an HSA" then how do I report this appropriately? do I simply report all of the pre-tax dollars in form 8889 part III as income and pay the 10% penalty, even if I withdrew it prior to filing?
