Thank you @dmertz .
When I requested our HSA admin, I did state that it was excess contribution in 2020, and this amount I requested was more that what I contributed in 2022.
I called HSA admin and they said it was excess contribution and regardless which year, they will only use code 2. I also asked company payroll if any w2 need to be corrected (let say for 2022 tax year), and the response I got this is between me and our HSA, nothing to do with payroll.
I guess I have to just write explanation to IRS and hopefully that clears this
