BillM223
Expert Alumni

Get your taxes done using TurboTax

Did you actually receive a 1099-SA for 2023? In rereading your posts, I can't tell if you did or not. In any case, in case you have a 1099-SA in hand, please do the following (if the distribution is larger than the excess being carried over):

 

You don't need to split the 1099-SA that you got into two pseudo 1099-SAs. 

 

Instead, when you enter the 1099-SA, it will ask you if the distribution was all for qualified medical expenses.

 

You will answer "no", and two more lines will appear. You will answer that you spent part of it on medical expenses. 

 

Then more lines will appear, and you can indicate how much was used for medical expenses.  You should make it so that the difference that was not for medical expenses should be the amount of the excess being carried over. That should trigger the excess to be added to income, and the 20% penalty.

 

Don't worry about the earnings - at this point, the IRS will take the 20% penalty in lieu of the earnings.

 

You should be clear of the excess problem from now on.

 

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