Page 8 of Pub 969 advises to deduct excess contribution in a later year.
If you overcontribute to an HSA, you must remove the funds or be subject to a 6% excise tax for each year it remains in the account. You have two choices, remove the overage or let it ride and pay the penalty.
Alternatively, you can use an excess contribution as your HSA contribution in a future year. You just let your excess contribution sit and then apply it later; the downside is there is a 6% per year penalty. The mechanism that allows this is the deduction, since next year you won’t actually deposit the contribution (it is already there), you will just deduct it on Form 8889. As an example, if you have excess contributions in 2018, you can let them sit there until 2019 and then use them as your contribution for 2019. Rolling an excess contribution to a future year is allowed per the IRS Form 969:
Deducting an excess contribution in a later year.
You may be able to deduct excess contributions for previous years that are still in your HSA. The excess contribution you can deduct for the current year is the lesser of the following two amounts.
- Your maximum HSA contribution limit for the year minus any amounts contributed to your HSA for the year.
- The total excess contributions in your HSA at the beginning of the year.
Just make sure that you don't make excess contributions for the upcoming year.