@gooseontheloose
1. No, there is no faster way to resolve this than waiting for your 2021 tax return. A resolution might have been possible on your 2020 tax return but it would have to have been applied to your account prior to May 17.
There is a second possible resolution to the problem that could be made on your 2021 tax return other than using the excess contributions as part of your 2021 limit. I have not mentioned it because I am not sure if it would work, and even if it did, it would mean paying a further 20% penalty. There’s absolutely no reason to do this since you remain eligible to make contributions and can use the method I already outlined, end it wouldn’t be any faster, because it would still only apply to your 2021 return.
2. At this point, you do not account for the gains that are attributable to the 2018 excess that has remained in the account. That’s what the recurring 6% penalty was meant to do. You will have to account for the gains that are attributable to the 2021 excess that you will have returned to you in order to apply the previous excess carryover to your 2021 limit. The HSA bank should have no problem with calculating this, and the dollar amount will probably be small since it will likely amount to just a few percent interest on a couple thousand dollars over 6 months. Since the excess will be returned to you in the calendar year 2021, it will be reported on your 2021 tax return as taxable interest or dividend income.
