Great questions, thanks DaveF1006.
TLDR: In my amended return I reported additional 2020 income and paid taxes on it. Please see final questions below.
To correct this 2020 employer error, my employer and HSA bank told me I needed to 1) file an amended return based on the new W-2c, 2) and have the HSA bank (a huge one) re-code the 2020 contributions toward 2021 distributions (their policy). I did both tasks. FYI, I asked to reverse the erroneous contribution out or give the money back, but they said no.
In my 2020 amendment I reported based on changes in my W-2c. It showed increased income of $750. Box 12c Code W was also changed from $1027.78 to $277.78; the difference is this $750, and the remaining $277.78 is the employer contribution. In the 1040-X notes I said I was filing with a W-2c which "corrected box 12c-W HSA contributions, wages, and taxes withheld."
With the HSA bank, per their direction, I re-coded $1,027.79 to 2021, the total above plus its $0.01 earnings.
For 2021, the total in this 1099-SA Code 2 form the HSA bank is $1,027.79. That makes sense.
Questions: Does it now make sense that there is no 5329? Am I now supposed to answer "no" I did not overfund my HSA because all the actions above resolved the 2020 situation? If I'm supposed to answer "yes," how would I resolve the resulting request for 5329 information?
