The software calculating the HSA excess personal contribution withdraw does not allow me to proceed, if I've already withdrawn more than I should have.

[tta]

@dmertz The 2024 Form 1099 SA (to be received next year) will certainly show $415 as Gross Distribution. Will I have to include that form in next year tax return calculation? Would you know how TurboTax will react when it sees $415 in the 2024 Form 1099 SA if I declare to have withdrawn $413 now? By the way, thank you so much for your time and effort to help here.

[dmertz]

The entry of the 2025 Form 1099-SA into 2025 TurboTax will serve only to add to 2025 income the amount shown in box 2.  The IRS is never going to correlate the 2025 Form 1099-SA with what you report on your 2024 tax return, at least not without a detailed audit.

[tta]

@dmertz The 1099SA form received next year will say "For Calendar Year 2025", "Gross Distribution $415", correct? Should I ignore it because $415 is already entered in Form 8889 and Form1040 this year already? Thank you much.

[dmertz]

Enter the 2025 From 1099-SA into 2025 TurboTax.  If there is nothing in box 2, it will have no effect, otherwise it will add to income the amount in box 2.

[tta]

The 1099-SA form received in 2025 should have code 2 "Excess Contribution" in box 3 so the amount $415 listed in box 1 "Gross Distribution" will have no effect on my 2025 tax.

[BillM223]

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