In recreating your scenario in TurboTax, say YES to the question 'did you pay for anything' so that you can enter the 1099-SA.
You should have a Code 2 in Box 3 for 'Excess contributions'.
Say YES your HSA contribution was made by your employer and deducted from wages on W-2.
On 'Type of HDHP Coverage' I indicated 'Family Plan' for January and February, and Medicare for other months (since Part B Medicare did not start until March 2021).
I got max contribution of $1,200. So the difference between the $1,600 on the W-2 and $1,200 would be taxable income. In your case, the difference between $1,367 and $1,600.
For 'did you overfund your HSA in 2020?' answer YES and enter the $500 excess contribution.
TurboTax asks if the excess $2,500 will be withdrawn by 4/18/22. YES tells me that it's too late to remove prior year excess, but can remove $2,000 contributed for 2021 ($1600 contributed by employer and $400 excess between $1,200 allowed and $1,600 contributed).
For the value on 12/31/21, enter $0. On the 'Your HSA Summary' page, it shows Taxable Distributions of $0 and Taxable Earnings on Excess Contributions of $40.
I hope this resolves your issue. If not, please post again and we'll try to help.
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