This is not in Pub 969, this is on form 5329.
[Line] "49 Additional tax. Enter 6% (0.06) of the smaller of line 48 or the value of your HSAs on December 31, 2022 (including 2022 contributions made in 2023). Include this amount on Schedule 2 (Form 1040), line 8".
So when your HSA balance goes to zero, then this particular penalty also goes to zero. There are other penalties calculated differently.
"Also, if true, this doesn't seem to be a universal rule if the individual is no longer eligible at the time the excess contribution occurred. "
Sorry, this is a very long thread, and I don't know what this refers to. Could you identify the person who posted it and what exactly was said? That is, "what isn't a universal rule?"
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