"a Form 8889 was generated. " - this is normal and would have been created in any case if you had any activity in your HSA.
"the amount of the distribution was reported as Additional Income on Schedule 1, Line 8," - technically, it was the amount of the excess that was added to line 8 - the amount on the 1099-SA might not have been the same amount.
"I will be again paying taxes on the distribution for the second time, having already paid with my 2020 return. " - No, you won't. Let's work on this.
"But Form 5329 was NOT generated." - that's correct; if you withdrew the entire excess, then you are not penalized the 6%, so no 5329.
"And when I use "Forms" to open Form 5329-S I am unable to input data into some of the fields. " - please don't do this, don't try to create a 5329 for 2021.
"if I try to amend my 2020 tax return and enter data into Form 5329-S I am unable to enter data into certain fields." - please don't do this, either.
******
"When I input this form into TurboTax 2021 and report the distribution as "not for medical expenses", the distribution ends up on Schedule 1, Line 8e "Taxable Health Savings Account distribution", and I will be again paying taxes on the distribution for the second time, having already paid with my 2020 return. "
What was the distribution code on the 1099-SA that you received that was for the amount of the excess that you withdrew? Was it "1"? I bet it was because you would not have been asked how much of it was for medical expenses if it were the correct distribution code of "2".
So when you contacted the HSA custodian last year to withdraw the excess, did you tell the HSA custodian that this was a "withdrawal of excess contributions"? That is different than any other type of distribution.
Also, when TurboTax asked you if you "overfunded" your HSA account in 2020, did you answer YES or NO? Since you withdrew the excess in early 2021, you "cured" the excess, so should have answered NO. If you did answer YES, go back and change your answer to NO.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
