"So if I use the entire excess for medical expenses, I won't have to pay taxes on that distribution?"
No, that isn't what I said. I assume that the HSA contributions were made through your employer (either by your employer or by you through payroll deduction).
If so, when your W-2 was printed, the code W amount (HSA contributions) was removed from Wages in boxes 1, 3, and 5. This means that the HSA contributions were not in your income and therefore not taxed.
However, excess HSA contributions are not allowed this privileged treatment; hence, they are added back to income to be taxed.
You asked if you spent the excess contributions withdrawn by you on qualified medical expenses, would these expenses render the withdrawn excess tax-free? The answer is No. You can certainly spend the excess any way you like - even on medical expenses - but you will still have to pay tax on the excess, because they were removed from Wages in the first place.
Of course, medical expenses not reimbursed by your HSA can still be placed on Schedule A as medical expenses.
And, yes, you should receive at some point a form 1099-SA from the HSA administrator reporting on the amount of the excess that was withdrawn as well as the earnings on the excess while it was in your HSA. This is why it is important to tell the HSA custodian that you are withdrawing "excess contributions" so that the custodian will know to calculate the earnings (regrettably not all do).
Note that you will not put this form on your 2024 return (now), but enter it into your 2025 return in early 2026.
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