So, let me get this straight. You had an excess HSA contribution of $1,500 on your 2019 tax return, and are trying to fix this on your 2021 return? The problem is that you can't do it by withdrawing the 2019 excess in 2021.
It is not at all obvious, but the last date you could withdraw an excess for TY 2019 was the due date of the 2019 return (usually April 15th, but for 2019, the due date was moved to July 15, 2020). And, in fact, if you filed an extension that year, you would have had until October 15, 2020 to withdraw the excess.
But after those dates, you can no longer withdraw the 2019 excess and escape any penalty.
And distributions are not tied to contributions. That is, just because you withdrew "excess contributions", that doesn't change the amount you in fact contributed. So the 0 on line 43 on the 5329 is correct.
So going forward, there are two ways to get rid of the 2019 excess.
1, Reduce your contributions in a future year (since you already maxed out 2021) so that your contributions plus the $1,500 fall under that year's annual HSA contribution limit.
2. Make a distribution equal to the excess that will not be used for medical expenses. This, however, is added to your income and incurs a 20% penalty.
The thing that catches many taxpayers is that the HSA is not a savings account into which you can willy-nilly make contributions and take withdrawals. There are definite rules, which, unfortunately, are not laid out very well in Pub 969 at the IRS website.
There is another issue: that you can't withdraw an "excess" when there isn't an excess for that year. In your case, you don't have an excess for tax year 2021. You contributed $3,600 which is the annual HSA contribution limit for a Self-only plan. So, no excess. In fact, if you don't do something and get audited, you will find that $1,500 you took out to be considered a distribution that was taken out for other than medical expenses, so it would be added to your Other Income and penalized 20%.
You have two choices:
1. Call your HSA custodian and ask if you can treat the $1,500 distribution as a "Mistaken Distribution". Note that the HSA custodian doesn't have to accept this (so be nice), but if they accept it, you will repay the $1,500 that they sent you, and they will amend their paperwork (to show that the $1,500 that you just sent them was not a normal contribution).
2. If you have $1,500 of unreimbursed medical expenses that were created AFTER the start date of the HSA, make a list of these expenses and apply the $1,500 to them. That is, at any point after you create the HSA, you can withdraw funds o pay for unreimbursed medical expenses incurred after the start date of the HSA. They don't have to be in the same year or even the same decade.
[Edit 3/7/2022 02:09 PST - corrected typo on date on original due date for due date]
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