To tie up this lose end...

I added another line to 1040 Line 21, Line 17 on "Other Income" sheet: "1099-SA reduction: lawful money and full discharge pursuant to 12U.S.C.§411 and §95a(2)" for the full gross distribution amount. Succeeded, got the cash out, and a refund on the tax penalty.

I am an honest person though, that money is safely locked up for future medical expenses on my terms, just not Obozo's.

Thanks for the confidence boost and courage to those who have helped me out so far!