In late 2019, I opened an HSA account and made a contribution. (This was not through an employer.) My financial institution then issued a 5498-SA. In early 2020 (prior to filing my 2019 taxes), I realized I was ineligible for an HSA so I withdrew the money plus the small amount of interest. I never used this money as a deduction on my tax return since I realized I'd opened the account by mistake before filing. Recently, my financial institution issued a 1099-SA, showing I'd taken a distribution in 2020. Again, I'd paid taxes on the contribution money, never having claimed it for an HSA. The only benefit I've received is the $25 interest which I know I'd need to pay tax on. How can I resolve this so I don't incur any penalty from the IRS?
