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Get your taxes done using TurboTax
You probably told the HSA custodian in 2024 that you were withdrawing an excess contribution, so they issued you a 1099-SA with a distribution code of "2" - which is your problem. But, as you will read in other comments in this forum, you can't withdraw excess contribution after the due date of the return (with one exception that doesn't apply to you).
So you got a 1099-SA which won't work until you change the distribution code to "1". Note that when you do, the interview will change somewhat, to enable you to say that this distribution was not for medical expenses.
Also note that this may invite attention from the IRS, because they look for changes to forms that are copied to the IRS. However, I would just document what you did and why and put it in your tax archive, in case anyone asks.
Your defense (and it would be a good one) is that you are willing to pay extra income and a 20% penalty just to cut off this carryover. You just needed to workaround a form that was incorrectly generated.
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