In 2021, I had excessive contribution of 500 dollars due to job change. And I just sent the withdraw request to the HealthEquity in 04/13/2024. (Due to some misunderstanding, I didn't do that in 2022). It seems I can only get the 1099 SA in 2025, so does it mean the only options I have is to pay the 6% penalty this year and get those excess contribution removed in 2025 for Tax Year 2024?
I take a look at the forms, it seems there is a question in Line 2 Smart Worksheet B in Form 8889 asking Excess HSA contributions withdrawn before April 15, 2024. But I cannot find a way to fill this out by answering the Turbo tax HSA questions. (Maybe this is only for withdraw of excess contribution made at 2023?)
Another question I have is regarding the code-2/code-1 1099 SA I would get in 2025 after I read the following posts:
1. HSA Excess Contribution from 2020 Question
2. Withdraw excess HSA contribution after 2 years
3. Reporting Excess HSA Contribution return
It seems from the HealthEquity the withdraw will be most likely result in the code-2 1099 SA. However, people are suggesting it should be code-1 simply because of the excess amount should be taxable given it's pre-tax money. While the post 3 mentioned that Turbotax would automatically put the excess amount in the Other income of Schedule 1 if it detects it. I checked my tax filing packages in 2021, the $500 do show up in 1040 item 8 as taxable. Isn't that mean the code-2 1099 SA form is working as intended? Am I missing/misunderstanding those posts?
Thanks and appreciate it!
