What is the value with code W in box 12 on your W-2? 7,200 or 7,529.48?
"They returned the over contribution to my 12/31/2021 pay check." Does this mean they gave you an additional 329.48 on your last paycheck?
"However, the balance in my HSA account didn't change. " You mean that in January the amount in the HSA was still 7,529.48?
"I did that and the bank mailed me a check of the excess contribution." So you received 329.48 twice, once from your employer and once from the HSA custodian?
"but would issue it for 2022. " Since they sent you the distribution in early 2022, this is normal. That 1099-SA should report your earning on the excess while it was in the HSA before being withdrawn, and you report the earnings on your 2022 ta return in early 2023.
"My W2 and 5498SA don't match." Don't worry about it. They often don't match except by comparing multiple years of records.
"will I be in trouble since IRS has the copy of 548SA?" No, we are going to do your HSA correctly, and the IRS will not worry about this.
"But if I report this amount as an income in 2021, will I have to report it again in 2022 when I receive the 1099SA? Then I will double pay tax for it." The 1099-SA in early 2023 is going to have a distribution code of "2", not "1". As a result, only the earnings will be added to your 2022 tax return, not the entire distribution.
"How do I do my 2021 tax return?" Please answer my questions in bold above, and I will address these issues.
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