dmertz
Level 15

Get your taxes done using TurboTax

My original reply indicating that the 2023 tax return would need to be amended relied on your assertion that an excess contribution was made, an assertion which later turned out to be false.

 

Section 223(f)(3) of the tax code describes excess contributions that are permitted to be returned before the due date of the tax return, including extensions.  Because the total contributions originally made for 2023 by April 15, 2024 were only $4,000, which is less than the allowable limit of $6,562.50 for 9 months of eligibility with a family HDHP over age 55, there was no excess contribution that was permissible to have been returned.

 

Your choices are to treat the distribution as a return of an excess contribution before the extended due date of the tax return, which is how it will be reported on the 2024 Form 1099-SA, despite the fact that there was no excess contribution that was permitted to be returned, or to treat the distribution as a regular 2024 distribution with an explanation statement that you provide with your 2024 tax return indicating that the reporting on the 2024 Form 1099-SA of a return of excess contribution is incorrect.

 

Neither of these choices is supported by TurboTax.  Because accurate entries into 2023 TurboTax will not cause TurboTax to indicate that an excess contribution was made (because no excess contribution was made), TurboTax will not permit you to treat the amount that was returned as a return of an excess contribution (because there is no provision in the tax code permitting the return of contributions that are not excess contributions).