For the 2021 distribution, they aren't saying they would include anything in Box 2, @dmertz. They are saying they would include the total of $475.01 in box 1, and then use distribution code "2 - Excess Contributions" for Box 3.
Is there anything inherently wrong with this? I am not sure why they couldn't use code 2 - Excess Contributions since that is exactly why I am removing it. I can't find anything that indicates this code can only be used if it's by that year's tax deadline. All I can find on Box 3 is that code 2 - Excess Contributions should be used for "distributions of excess HSA or Archer MSA contributions to the account holder." Wouldn't this be the most accurate way to report the 2021 distribution?
