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2016 Excess contribution (dist code :2) reporting in 2017 taxes
FYI - I don't have medicare but have a HDHP via employer for the family.
‎April 15, 2018
9:15 PM
Hello
I had excess contribution of $135 for tax year 2016 but was withdrawn as distribution after April 17 ,2017. In my case we visited a medical office associated with my employer - they mistakenly charged us (it is supposed to be free charge up to $1000 dollars per family) and refunded the $135 (which amounted to the excess contribution). The amount is listed as distribution code 2 in my 1099-SA.
I read the pub 969 from IRS but could not figure out if I should pay the 6% excise tax or if I should characterize this as a normal distribution that is not used for medical expenses (20% tax + ordinary income).
Currently TT has calculated 6% excise which is about $8 (which goes on line 59 of form 1040). Will I have to pay the 6% excise tax every year until this about is in the HSA account - in my case I just have to pay it in the 2017 taxes and I should be done right (since the amount was withdrawn on May 5 2017).
anything else I should do or am I done taking care of this excess contribution ? thanks much !