1) Yes, you will enter the 2022 Form 1099-SA on your 2022 tax return.
2) The 2022 Form 1099-SA should have code 1 in box 3 since you removed the excess after the extended due date of the 2020 tax return. When you enter it on your 2022 tax return and indicate it wasn't used for medical expenses then TurboTax will automatically calculate the 20% penalty on your tax return.
- Click "Federal Taxes" on the top and select "Wages & Income"
- Click "I'll choose what to work on"
- Scroll down and click "Start" next to "1099-SA, HSA, MSA"
- Answer "Yes" to "Did you use your HSA to pay for anything in 2022?"
- Enter your Form 1099-SA information
- On the "Did you spend your HSA money on medical expenses only?" screen select "No"
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