@BillM223Thank you so much for your patience and explanation. Would you mind explaining where the original excess was added? Go over my return, 1040 Line 1 is the same for both original (1099-SA code 1) and amended (1099-SA code 2). My W2 already reduced my Box 1 amount by the HSA contribution. I am assuming this is how I got my tax credit.
However, line 1040 Line 8 for the amended is $2070 in the original, and $0 in the amended. Wouldn't this mean in the amended version, the $2070 is just gone, and isn't taxed anywhere? It wasn't taxed in the W2, and wasn't taxed in the distribution. I find it hard to believe this $2070 isn't taxed at all.
When I added the 1099-SA to TurboTax and went through the steps reporting my HDHP coverage and such, TurboTax also calculated my limit to be $4150, so there was no excess either:
- This HSA was not inherited
- All $2075 of my original contribution was through my employer, by deducting from my income.
- My employer did not tell me about other contributions.
- I did NOT have Medicare at 2024
- I was covered by an HDHP from June 2024 through Dec 2024. (TurboTax calculates my max contribution limit to be $4150)
- I did not overfund my HSA in 2023.
- I did not have a HDHP on Dec 1, 2023
- My wife did not have an HDHP on Dec 1, 2023
The final result that TurboTax calculates a refund of $870, $414 from removing 20% penalty + $456 from removing income tax in the 22% tax bracket. The $456 refund is the part I don't understand, because I wasn't taxed on it in the first place when it got removed from Box 1, and I don't see it being added anywhere else in the 1040.
Sorry for the multiple tags in quick secession, but I found in the TurboTax instructions that say "If you are covered by an HDHP and another HDHP plan during the same month, select None." I had been selecting "Self Only" for the months I had an HDHP. During this time, my wife had a PPO plan that covered herself, but an FSA that covered both of us.
I am confused if I should change my answer to "None", since this sounds like the place to report that I am not qualified for an HSA, but it the instructions specify a non-HDHP plan, which an FSA is not: I only had my HDHP as my health insurance during this time. However, if I choose "None", it calculates the correct amount of refund I am expecting, the $414 20% penalty for excess contribution.
