Actually, your son would have been best served by paying the $118.08 out of the HSA and $1.92 directly from his checking account to the medical bill, leaving the HSA out of that last part.
They also said along with mailing them the form indicating the box 2 ‘correction,’ he would need to include a check for $1.92 so that coupled with his $11.08 HSA balance, they would send him a check for the entire $13, thus correcting the error. Does this sound right?
Actually, this is quite correct.
It is not clear to me what type of HDHP coverage your son had in 2023, and how much he contributed, either directly or through his employer. Please me know. Then will we know if amending the 2023 is called for.
"Thus, the HSA has a current balance of $11.08. On his 2023 tax return, he filed Form 8889, leaving Line 1 blank (because he wasn’t in a single or family HDHP) and putting the $13 on Line 2."
What does this mean? He had NO HDHP coverage in 2023? Then he should not have made the $13 contribution. But the $118.08 was already in the HSA from a prior year?
Anyway, it looks like if he can do this corrected contribution, the way the HSA custodian says, that would be great. Then there would be no excess in 2023 and no need to amend.
He should file 2024 on time in any case, because you are required to file something by April 15th (even if it is just an extension request). Of course, the amount he owes is due on April 15th, even if you file an extension. And if his 2023 contribution is "corrected", then there is no excess and no reason to worry about it on his 2024 return.
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