dmertz
Level 15
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Get your taxes done using TurboTax

It's too late to correct the $1,154 excess contribution made for 2021 and avoid a penalty on your 2023 tax return unless you obtained distributions from your HSA in 2023.  If you do have a code-1 2023 Form 1099-SA showing distributions, in TurboTax you'll enter as the amount applied to medical expenses the amount from box 1 minus $1,154 (but not less than zero).  This will make the portion not applied to medical expenses taxable and subject to the 20% early-distribution penalty, reducing the excess.

 

If after doing the above you still have some excess carried into 2024, to avoid a penalty again on your 2024 tax return you must make a taxable distribution from your HSA before the end of 2024.  

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