As the earlier member explained, excess contribution amount for 2023 (including earnings on the same) was captured as Other Income in the 2023 tax return since that amount was withdrawn between Jan 1- Apr 15, 2024 from the HSA custodian. This is done (as per publ. 969) to prevent paying the penalty although you do not get a 1099-SA 2023 showing this excess contribution. So, the 2023 return is all good. Fast forward to 2024 tax return, the custodian issues the 1099-SA 2024 for this excess contribution withdrawal in 2025 (understandably since the withdrawal happened between Jan1-Apr 15, 2024). Now this 1099-SA 2024 has to be shown in the 2024 tax return to avoid a notice from the IRS as you say. But as you can see, if you include this in 2024 return, you are paying tax again on this amount since you already paid tax on this amount in 2023 return (Other Income). So, there should be a way to include this 1099-SA 2024 amount in the 2024 return without being taxable. Hope it makes sense, and you provide a solution.
