I didn't explicitly request an extension, but I was under the impression that you could do an excess contribution withdrawal and file an amended return during the 'automatic 6-month' extension for corrective action. Maybe this didn't qualify?
I did 'redeposit' the 2022 excess into my HSA for 2023. It was all part of the same transaction with the HSA custodian, part 1 - they removed the excess from 2022 and then part 2 - they redeposited it as a contribution for 2023. This was during the 6 month extension period above. In my amended return I paid income tax on the excess withdrawal so I thought this would be considered a personal contribution for 2023.
I think I now have a short-term excess from my 2023 employer payroll contributions. I did request the 2023 excess as a withdrawal of excess contributions and they took out the excess + earnings. I did get a check for that, I did not redeposit that. I haven't gotten a 1099-SA for that yet. I understand the 1099-SA will be entered on next year's return. Does that mean both the original contribution amount + earnings will both be handled on next year's return? I thought the contribution would be income on this year's return and the earnings would be income on next year's return.
Right now the $1700 excess isn't showing up on line 8f Schedule 1, only the earnings from from the 2022 excess withdrawal - $50. Line 13 on Schedule 1 shows $2000. TurboTax does say I have an excess contribution of $1700, which I said I would (and did) withdraw, but this is removed from my 'personal' contributions not my employer contributions, which is where I took them from.
It seems in trying to fix this situation I've made it a lot worse. Is my 2022 excess contribution actually a long-term excess? Should I have paid the 6% penalty on that money last year? Since I took out the 2023 employer contributions does that help 'use up' some of the 2022 excess? Are the contributions + earnings I took out from my 2023 employer contributions actually a regular distribution and I owe the 20% penalty (and income tax?)?
I appreciate your help with this. I thought I mostly understood how to handle this situation, but it's clear to me now that I have no idea what I'm doing.
