I made a 2015 test case that has $3407 of a W2. Then I ran two scenarios.
1 - in interview where it says $57 excess, I elected to withdraw $57. In this case, F1040, line 21 has $57 because it becomes taxable. F8889 line 12c is zero (excess withdraw). And no penalty from F5329, Part VII because you withdrew the excess.
2 - in interview where it says $57 excess, I elected to NOT withdraw $57. In this case I still have $57 on F1040, line 21 because the excess is taxable. F8889, line 12c is $57 (excess). And I now have F5329 with $3 on line 49 (6% of $57). The $3 carries forward to F1040, line 59.
Then, I tested scenarios in 2016. I enter a W2 with $3550. I indicated 10 months HDHP for limit of $2792.
1 - ($57 withdrawn in 2015), in interview you now have $558 excess. I elected to withdraw partial amount $388. Then EOY account balance entered as $388. In this case, I have $558 on F1040, line 21 now taxable as excess contribution. F8889 line 12c is $170 (portion of excess available). On F5329, I have a $10 penalty on line 49 (6% of ($558-$388=$170). Ten dollars carries forward to F1040, line 59.
2 - $57 NOT withdrawn in 2015), in interview still have $558 excess (the $57 is still in the accumulated excess but not shown here because taxed last year). I elected to withdraw partial amount $388. Then EOY account balance entered as $388. In this case, I have $558 on F1040, line 21 now taxable as excess contribution. F8889 line 12c is $170 (portion of excess available). On F5329, I see the $57 on line 42. I have a $14 penalty on line 49 (6% of ($558-$388+$57=$227). Fourteen dollars carries forward to F1040, line 59.
Based on our discussion, you should have filed one of theses cases.
1- properly reported withdrawing $57 in 2015.
2- properly reported NOT withdrawing $57 in 2015.
Maybe you can review your papers to see where your taxes are different than what I have done. Then maybe we can see where the problem lies.
