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To correctly report the excess HSA contributions is for you to take the excess from your account. To avoid penalty you have until October 15th if you filed an extension to withdraw the excess.

However please be aware that there is $7,300 family limit applies to married couples even if one spouse is covered by a family plan and the other spouse has their own individual plan. In this scenario, the couple may split their contributions any way they like, as long as the couple's total contribution doesn't exceed $7,300. Spouses 55 or older at the end of 2022 are allowed to contribute an additional $1,000 to their own HSA.

If you overfunded or weren't eligible to contribute to your HSA in 2022, you'll need to withdraw the excess amount by April 17, 2023 to avoid a penalty (October 15 if you filed an extension).

Some things to keep in mind:

• The above limits are prorated depending on the number of months you were covered by an HDHP and had no additional health coverage
• If you were only covered by an HDHP for part of the year, your contribution limit may be lower than above limits
• If you're covered by an HDHP on the first day of the month, you're considered covered for the entire month
• If you had HDHP coverage on December 1 (the last month of the year), then you can use the full annual HSA contribution limit for your HDHP coverage, regardless of the number of months you had coverage
• Spouses on separate plans: The $7,300 family limit applies to married couples even if one spouse is covered by a family plan and the other spouse has their own individual plan. In this scenario, the couple may split their contributions any way they like, as long as the couple's total contribution doesn't exceed $7,300. Spouses 55 or older at the end of 2022 are allowed to contribute an additional $1,000 to their own HSA

Here are a few options for getting rid of excess contributions:

• You can simply take a nonqualified withdrawal of the excess amount. This distribution will be taxable and subject to a 20% penalty.
• You can take qualified withdrawals (for medical expenses) that take your HSA balance to $0. The penalty is assessed on the lower of your excess contribution or your HSA balance at the end of the tax year. By drawing the account down to $0, you will have no more penalty assessed.
• You can change your health insurance plan back to an HDHP that is HSA-eligible again. This will allow you to use up the excess contribution.

We recommend revisiting the HSA entry:

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