I retired in June 2018, my employer made an excess contribution to my HSA fund of $296 at that time. I carried this overage and paid the yearly tax on the excess until 2025. In 2025, I contacted the HSA fund and withdrew the $296 in March, identifying the withdrawal as an employer overfund. The HSA fund sent me a 2025 1099-SA form, which identified the $296 distribution, but identified this as a Code 1 Normal Distribution, rather than a Code 2 "Excess Contribution" distribution. Is a Code 1 withdrawal closing out the funding excess in TurboTax and in the eyes of the IRS and the HSA fund. I do not believe the TurboTax box is checked indicating overfunding, explicitly indicating an overfunding condition is being addressed. Do I need to ask the HSA fund to provide a new SA form identifying the distribution as Code 2. I suspect there is no impact to the tax, because the $296 is already computed in the taxable income. TurboTax gives a clean review for the above conditions.
Thanks, krs
