@boco2023 wrote:
Thank you, @Mike9241, @BillM223, @Opus 17 . It does make sense. Great information! I have not claimed him as dependent (yet), and based on your responses it seems I should not claim him as dependent. He didn't have any income in 2023. Does he still need to file taxes, despite having contributions made (by others) to his HSA in 2023? (he also got the Form 1099-SA).
Did you read my answer? All your questions are already answered.
1. If he qualifies to be claimed as a dependent by someone else, he must answer "yes, I can be claimed as a dependent". That will disqualify his contributions, even if you don't actually claim him. Anything else is improper and could potentially be considered fraud.
2. Under the law, he made the contributions since it was his account.
3. He must file to report the contributions. He must also either a) pay a penalty for making excess contributions, or b) remove the excess contributions before April 15. This is a special withdrawal, not a regular withdrawal, and he needs to contact the bank about it. The IRS gets copies of his contribution record, and if he does not report them (and either also report removing them, or pay the penalty), the IRS may send a letter asking for more information or just assessing the tax and penalties.
