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Deductions & credits
You can still remove the excess contributions and earnings from your HSA without any penalty, and report this amount as Other income on your Federal 1040.
You will need to contact the HSA trustee to make it known that you wish to remove the excess contribution. This will alert them to treat this transactions separately from the normal withdrawal for medical expenses. You will receive another Form 1099-SA with a distribution code of 2, the form will show the distribution of the excess and the earnings.
The other option is to leave the funds in the HSA which will result in the 6% penalty, and then use the excess for expenses next year. The keep you contributions at or under the limit and there will be no further penalty.
‎June 4, 2019
11:13 PM