If you or your spouse will remain in an eligible HDHP for all of 2021 and not have other disqualifying coverage, then you would have been allowed to use the “last month rule“ to contribute up to the maximum amount for 2020 even though you were ineligible for part of the year.
Unfortunately, because you did remove the money, it will now be mandatory that you file an amended return. It is too late to return the contribution for 2020, because this would have to be accomplished by the end of business on Monday, May 17, and I don’t think you will be able to get the process completed in time, because most HSA banks take a couple of days to process a deposit.
When you launch the amending process, go into the HSA section of the medical expenses interview on the deductions and credits page and indicate that you did not have qualifying coverage for the entire year; indicate no coverage for January and February, and eligible coverage for the rest of the year. TurboTax will then tell you that you had an excess and will ask you what you did with it, and you will say that you removed it. You will pay regular income tax on the removed excess but you should not have to pay a penalty. (You should answer that you did not have eligible coverage, because even though you had eligible coverage you were disqualified by the FSA.)
