1099-SA reissued without corrected box checked

[cboise]

I received a revised/corrected 1099-SA form from my HSA account trustee, and it wasn't marked as corrected at the top of the form, but it was definitely a correction, since the original 1099-SA form they sent me showed $0 in distributions, and the revised/corrected one shows the accurate amount of $9,900+.  I didn't notice the error when I was doing my taxes, so filed based on the $0 distribution 1099-SA I had originally received, but it shouldn't matter because it was all used for eligible medical expenses.  Two questions:  If my form wasn't marked as corrected, should I still file an amended return?  The question in TurboTax specifically asks whether my 1099 form is marked as corrected; the accurate answer would be no, but it's obviously a corrected version of the original one.  Second:  If I enter the corrected amount for distributions to possibly amend my return, it bumps up my blended tax rate and tax liability to where I would now owe $1,700 or so.  I don't understand that.  I've read other threads about the problem with HSA distributions counting as income unless you offset that with the same amount under medical deductions, but I take the standard deduction so I have nowhere to offset the distribution amount.  Is there another way I can offset the 1099-SA amount so it doesn't bump up my tax liability?  It truly should be non-taxable income since it was all spent on medical expenses.

[DawnC]

Don't mark it as corrected if the box isn't checked, but you should enter it.   And, only file the amended return if it results in a change in your refund or tax due amount.    When you enter the 1099-SA, TurboTax will ask you if the distribution was spent only on qualified medical expenses.   Once you mark that box, the tax is removed as the distribution is not taxable.   Did you answer Yes on that screen?  

[cboise]

Thanks for your response.  I did answer Yes on that screen, so I'm confused why it changed my tax rate and tax liability when it should be non-taxable income.  And I was only able to get that far by saying I received a corrected 1099-SA, which is also a little confusing.  It's a yes or no answer, and it IS a corrected 1099, but it's technically not marked as corrected on the form itself.

[dmertz]

Issuers of Form 1099-R will often not mark the CORRECTED box if the change the form before the original is sent to the IRS and the original was never sent to the IRS.  If that's what was done, the first one should be disregarded.  In fact, a Form 1099-SA with $0 in box 1 is meaningless other than to say that there was no distribution, so it would be appropriate to disregard the original even if you hadn't received the second one.