1. You will enter the 1099-SA into TurboTax in the HSA interview (Deductions & Credits->Medical->1099-SA, MSA, HSA). Because the distribution code is "2", the amount in box 1 will be ignored (this is because the excess was added back to income in your 2023 return); the box 2 amount (earnings) will be added to Income, as it should be.
2. You don't make any change or amendment to your 2023 return, after all, what your employer did was correct.
3. You enter your 2024 W-2 as reported (I assume that the code W amount in box 12 of your W-2 is 4,125).
4. Because you reduced your HSA contributions by $25, you left room for TurboTax to apply the $25 carryover as a "personal" contribution (lines 2, form 8889) for 2024. This will "use up" the carryover, and so the matter will be done with.
5. Please do not try to go into Forms mode (if you have the CD/download version of TurboTax), and make changes yourself - let TurboTax handle it. It sounds like the entire issue will become moot with your 2024 return.
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