Anonymous
Not applicable

Reporting Excess HSA Contribution return

Hello,

My spouse has an HSA through her employer (family) and for year 2022 the total contribution (employer/employee) ended up at $7412.00 ($112.00 over contribution limit).  We recognized this in 2023 and contacted her HSA re: return of the excess contribution.  When my wife spoke with the HSA over the phone, the customer service agent was unable to provide a satisfactory answer about whether we needed to specify the amount of gains on the excess contribution to be returned.  While we were $112 over the limit, we requested $130 returned to ensure we would be covered for any gains the $112 may have accrued in 2022 (HSA was unable to tell my wife over phone this information-- in retrospect I now realized requesting more was a mistake).  We received a check for $131.98 in the mail (130 + 1.98 in gains/interest) last week.

 

Going through the  HSA section in Wages&Income section, Turbotax says it looks like we have an excess contribution of $112.  I select "We'll withdraw some of the excess contribution by April 18, 2023" and when I try to type amount withdrawn as $130, it gives me an error (saying I can only enter up to $112).  I am able to enter the forms mode and enter $130 manually into Form 8889-S in line 12 B, but then the line 12 C becomes -18 (negative 18) and I'm not sure this is correct (probably not correct?).

 

Any recommendations on how to proceed now that we have a return of our excess HSA contribution + $18?  We had medical expenses for 2022 well in excess of $18 (but so far have not withdrawn anything for these expenses, or expenses from any previous years, but have saved all receipts).    And do I need to add the full $130 (or just $18) as "Other Income" or does Turbotax do that automatically with information supplied above?  

 

Thanks in advance for any recommendations