HSA excess contribution penalty

[padam]

Hi,

I went through multiple posts but haven't found clarity on the 20% penalty clause. I(through my employer) made an excess contribution to my 2024 HSA which I have already withdrawn(before tax due date April 15,2025) by contacting the HSA provider. This excess contribution is being captured on Schedule 1, line 8f as income. But the IRS definition/explanation for line 8f says that the amount is subject to a 20% penalty. However on going through similar posts I have understood that any excess withdrawn prior to the tax deadline is treated as and taxed as a part of the normal income. Is this amount supposed to be captured in a different way? Or does IRS somehow know not to add 20% penalty to this?

[KeshaH]

A withdrawal of excess contributions is not subject to the 20% penalty. You'd only be penalized if you took a normal distribution and didn't use the funds for medical expenses.