“So when you did your 2021 return in early 2022, did TurboTax not tell you about the excess contributions? I am trying to understand what actually happened.” – I did not have an excess contribution for 2021 at the end of 2021. The excess contribution for 2021 occurred in June 2022 when I was approved for the Social Security survivor benefit and was retroactively enrolled in Medicare Part A back to September 2021 (6 months prior to my initial request for benefits in March 2022).
“#1. What was the amount of the excess for 2021?” – I stopped my 2022 HSA contributions in July 2022. I requested a distribution of my 2021 HSA contributions from September thru December 2021 ($1462). I also requested a distribution of my 2022 HSA contributions from January 2022 thru July 2022 ($2625). My HSA custodian supplied a “Request to Return Excess Contribution Form”. I returned 2 copies of the form, as directed by the custodian – one for 2021 excess contributions of $1462, and one for 2022 excess contributions of $2625. I received two 1099-SA’s for 2022 – one for $527.12 code 1 (normal distribution of medical expenses), and one for $4087 code 2, the total of the 2021 and 2022 excess contribution distributions.
“#2. When did you file your return in 2022 for 2021?” – I filed my 2021 tax return in April 2022.
“#3. What was the amount of the excess for 2022? – $2625
“#4 Have you filed your 2022 return yet (I suppose not)?” – No, I have not.
Since I posted this question, I reread and reared other questions and replies similar to mine. I now understand that I should have requested a normal distribution of my 2021 “excess” contributions. That would have included the 2021 distribution ($1462) in the code 1 (normal) 1099‑SA for 2022 and omitted it from the code 2 (excess) 1099-SA for 2022. Everything would have been fine. I would pay a 6% excise tax on the 2021 amount $1462 since it remained in the HSA account on December 31, 2021.
I called my HSA custodian today to ask if they could file corrected 1099-SA’s, and they said no, they cannot. Is this true, or are they trying to avoid making a correction? Was the error totally on my part, or did the custodian error by making the 2021 distribution in 2022 as an “excess” distribution? I am planning to file for an extension. I have made a copy of my return in TurboTax and “massaged” the 1099-SA numbers to reflect what should have been done. So, I can fairly accurately estimate my tax liability. What are my options to “correct” this in order to make a final 2022 filing?
Thank you very much for your assistance!
