1. No - your employer didn't make a mistake - the W-2 was correct.
2. Since you are not going to ask for a corrected W-2, using the W-2 that you already have is fine.
3. If you are withdrawing the entire excess, then there is no 5329 or 6% penalty. This penalty is only for excess amounts that are carried over to the next year. Is there any reason that you can't withdraw the entire amount of the excess? If you tell TurboTax that you withdraw the entire excess, there will be no more problem as noted in the first sentence,
4. It is normal that the 1099-SA for the return of excess contribution is done for the next year's return. This is because the earnings span both the 2024 tax year and the 2025 tax year...so entering it on your 2025 tax return in early 2026 is correct.
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