"the software only asked what the value of my HSA was at the end of 2020" - the software asks this because it is calculating your penalty for carrying over excess contributions. The penalty is 6% (0.06) of the smaller of total excess contribution's being carried over or the value of your HSAs on December 31 of the tax year. When your HSA drops to zero funds, then the penalty will be zero, because 6% of zero is zero.
The $1,700 is still there. It's not necessarily in your HSA anymore, but since you have not cured the excess, it is virtually still there. As I noted above, there are only two ways to get rid of the carryover after the due date of the return for the year in which you incurred the original excess:
- Apply the excess to a subsequent year's HSA contribution limit, or
- Make a distribution for NON-qualified medical expenses.
So tell me the following:
The original excess was generated for the 2018 tax year, right?
In 2019 and 2020, did you have HDHP coverage? If so,
A. what kind of HDHP coverage did you have in 2019 and 2020?
B. What were the amounts you contributed to your HSA in 2019 and 2020 (if any)?
C. Is your HSA now empty?
"There was no IRS form 8889 produced by the turbotax software in my tax filing." - I take this to mean that you did not make any contributions to your HSA in 2020. How about in 2019?
As before, place @ BILLM223 (without the space in between) at the bottom of your reply so that I will be notified of your response.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
