@cb0202 wrote:
Yes, when I checked on my W2 it shows on line 13, "Ret.plan" there was an X noted. Not sure, if that's what it means.
Just want to make sure and finalize that I can just withdraw the $350 in my HSA using the Fidelity debit card?
Because that's what I'm worried about: if it's okay to withdraw the $350 from HSA, which it shows during the process of my tax return through TurboTax.
No. The removal of an excess contribution is a special procedure, not a regular withdrawal. Contact the HSA bank, or check their web site, there is probably a special form. This must be done by April 15. The HSA bank must also return to you any earnings that are attributable to the excess contribution (they already know this procedure and should do it automatically) and those earnings are taxable on your 2024 return, even though they are actually paid in 2025, because they are attributed to ineligible 2024 contributions.
If you just have your HSA funds in a simple bank account, it might only be a tiny amount of interest. If less than $5, the IRS will probably let you get away with not reporting it. If more than $5, you should probably file an amended 2024 return to report the extra income and pay any extra tax, if owed. The attributed income is reported as "other" or "miscellaneous" income not on a 1099.
