Your friend may receive a W-2 from his employer showing only the HSA Contribution in Box 12. He may also receive a 1099-SA from the Plan Administration showing the $7500 he withdrew.
If so, he could report the 1099-SA in TurboTax. As long as he indicates 'it was used for medical expenses' there is no tax impact. Click this link for info on How to Enter 1099-SA.
If he does receive a W-2, it can be entered with $1 in Box 1 for Wages so that TurboTax will pick up the HSA contribution in Box 12.
If he does not receive a W-2, in the HSA section of TurboTax, he can indicate his employer contributed $4450 to his HSA.
However, if if did not receive both Stimulus Payments, if would be beneficial for him to file to get the Recovery Rebate Credit. This is calculated in the Federal Review section.
If he did receive his Stimulus Payments, it would not benefit him to file a return, but he should keep his tax documents in case of question by the IRS.
Click this link for instructions on How to Claim the Recovery Rebate Credit with No Income.
Luckily, in TurboTax the return can be prepared to see what the outcome would be before deciding to file (and pay).
He would have no Filing Requirement in California.
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