If you withdraw the excess by the extended due date of the return (April 15, 2021 unless you extend the return), then there will be no "penalty". There is a "penalty" only if you fail to withdraw the entire amount by the due date.
Contact your HSA custodian and tell them that you want to withdraw an excess contribution. They likely have the form online at their website.
The HSA custodian will send you a check for the amount. At the same time, TurboTax will add the excess to line 8 on Schedule 1 (1040 as Other Income to be taxed - IF the excess was through the code W amount in box 12 on your W-2.
If the excess was due to a personal contribution (i.e., not through your employer), then the amount that would have printed on line 12 on Schedule 1 (1040) is reduced by the amount of the excess.
"I already claimed it all and it was distributed to me."
Does this mean that you have spent it all already so there is nothing in your HSA to withdraw?
In that case, you will have to carry over this excess. You will dinged 6% on the excess (and form 5329 will be added to your return). AND you must remember that you need to reduce your HSA contributions for 2021 by the amount of the excess, so that the excess will be used up next year.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
