One of the difficulties of discussing an HSA is that the events take place over the course of two or occasionally three calendar years, and we often don't know which years you are referring to.
So let's try from the top:
1. You went on Medicare in late 2022. I assume that this was July or later. If you already over 65, then the SSA backdates the Medicare start date to 6 months earlier or your 65th birthday, whichever was later.
2. It sounds like you asked for the withdrawal of excess contributions for 2022, and Fidelity sent the excess to you plus some earnings on the excess.
3. "Fidelity told me it had no effect on my 2022 taxes," - It is true that the 1099-SA had no effect on your 2022 taxes, but TurboTax automatically added the amount of 2022 excess to your Other Income. This is why the 1099-SA doesn't work the way you think it should work.
4. "when I did my 2023 taxes I would report the contributions, which they would report to me in my 2023 1099-SA as 2023 income and I would pay tax on that money in my 2023 taxes. " You will enter the 1099-SA on your 2023 return, but since TurboTax already added the excess contributions to your 2022 return, it won't do it again for 2023 (the distribution code of '2' causes TurboTax to ignore the contents of box 1 (the excess) for 2023). Only the earnings in box 2 will be added to Other Income for 2023. So it appears that Fidelity about this.
5. Line 14B is not only HSA rollovers, but also excess withdrawn before the due date of the return. This is where the time issue becomes a real problem. I am thinking that this is the excess for 2022, but the eclipse is coming ;-)...
OK, note that the 1099-SA does NOT add income except for earnings the year after. So it sounds like a number of your concerns are mislaid.
TurboTax actually does nearly all HSA things correctly, but since the taxpayers don't understand what it is suppose to be doing, they are full of unwarranted concerns that TurboTax is not operating correctly. Instead, please do what you are doing and come back and ask us on specifics, and I imagine that you'll find that everything is OK.
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