Do I need to file an Amended 2023 Tax return for Federal & State if I received a corrected W-2C form?

[pk752rf]

Hi,

      For 2023 Tax year my company made an excess contribution of $38.46 as a company matching contribution and I have already maxed out my portion of the contributions so it exceeded the 2023 IRS limit of $7,750.

I reported it to my Payroll team but they did not fix the issue until now and I now received in April a new Form W-2C showing the excess HSA contribution as additional income.
I have already filed my 2023 taxes both Federal + State at the end of February and paid my taxes and also paid 6% excise tax on the Excess HSA Plan Contribution of $38.46.
Do I need to file an Amended 2023 Federal+ State Tax returns because of the new W-2C form or I don't need to as I have already paid taxes on it to IRS?
Thanks for your help.

[KrisD15]

It would be wise for you to file an amended return.

1. The IRS gets a copy of the W-2C and will look for it to be reported

2. Your tax liability could be adjusted (if only slightly) for the corrected W-2, probably in your favor.

3. Since you did not "correct" the excess HSA on your original Federal Return, (you only paid the tax on it) the excess will show up again next year and you will again pay the 6% penalty tax. This will continue year after year and the correction in later years is much harder to do than the year after the excess contribution is made. 

[pk752rf]

Hi Kris,

    Thanks for your prompt reply.

Do I need to file Amended Tax Returns for both Federal and State?

Also I have yet to receive a corrected Form 1098-SA from my HSA plan so should I wait for that before filing my Amended returns?

Also I should file the Amended returns by April 15,2024 correct?

 Thanks for your help.

[DawnC]

You will only need to file the state amended return if there is a difference in the amount you were refunded or had to pay.   If there is no change, don't file the amended state return.

Yes, wait until you have everything and your original return is fully processed before you file an amended return.

And no, you have 3 years from the date you filed the original to file an amended return, so no rush!

[pk752rf]

Hi Dawn,

         Thanks for your prompt reply.

I did not get any refunds for both Federal and State taxes and I have already paid the taxes I owed and my taxes are done per the E-file confirmations I received.

Unfortunately because of this corrected W-2C forms I have to file Amended Returns again and I hope I won't be paying anymore taxes than I have already paid as the amount is small.

Thanks for your help.

[BillM223]

In the future, if your employer makes a mistake again and overcontributes to your HSA, don't worry, TurboTax will take care of the extra income and what not, and you can skip the W-2C and amendments.

Just enter the original W-2, and TurboTax will not only alert you to the excess, but will invite you to withdraw the excess, added the excess to Other Income, and other then asking the HSA custodian for a "withdrawal for excess HSA contributions" you don't have much to do.