tta:
That is correct. When you receive a 1099-SA with a code '2' in box 3, then the entry in box 1 is ignored (because the excess has already been taxed in the year of the original excess by TurboTax who added the excess to Other Income), and the entry in box 2 (the earnings on the excess) is added to your income in the year following the excess.
As dmertz very correctly pointed out, the above description assumes that the HSA contributions were made through the employer. Contributions made directly to the HSA custodian are easier to deal with, as noted above.
@tta
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