Hi!
I have a question about how to have my HSA excess contribution reflected properly in TurboTax. I have TurboTax Premium 2023 via the web browser.
My situation
- For the 2022 filing I had $1,430 in excess contributions and paid the 6% excise.
- For 2023 I was eligible to contribute to my HSA for 6 months (I switched out of a high deductible plan mid-year), and contributed $1,925 through my employer
- So this means I still had $1,430 in excess contributions by the end of 2023
- Realizing my mistake, I withdrew funds from my HSA in March 2024, for an amount equal to the excess contribution ($1,430) plus earnings on the excess which I calculated ($325).
- Because I made the withdrawal in 2024 (for the 2023 year), I have not been issued a 1099-SA yet
How I intend for this to show up in TurboTax
- In order to not pay the excise tax, I removed my excess and earnings on the excess. I consider the "excess" a portion of the contributions I made in 2023 and then removed for the same tax year (2023)
- I would expect this amount to be taxable for 2023 given they were reported on my 2023 W-2
- It's not clear to me whether I would owe the 20% penalty, given I removed the funds in the same year as contribution
How it's actually showing up in TurboTax
- If I indicate that I did not have a 1099-SA, then TurboTax just has me paying the 6% excise tax on the $1,430 excess (same as in 2022)
- If I indicate that I had a 1099-SA (despite not being issued one yet), and fill in the details I'd expect (box 1 is $1,755 and box 2 is $325 and box 3 would have the value 2 for excess contributions), then I see see that I'm paying the 6% excise on $1,430 and have distribution (line 14a) of $1,755 but no Taxable Distribution (line 16). I would have expected to have no excise tax (given I removed the excess) and have a taxable amount which is then reported as income, and potentially the 20% penalty (?).
Any guidance here would be much appreciated. I don't want be stuck with paying a 6% excise tax forever, and so have tried to remove the excess/earnings. If the solution here is to pay the 6% excise in 2023, wait for my official 1099-SA, and handle this in 2024 filing then that's OK too.
Thanks!
