Employer contributions were taxed in 2022, and were subsequently withdrawn. TurboTax 2023 asks for the amount reported on 2022 Form 8889, which was the amount included in income in 2022. As soon as that amount was added, 2023 tax increased. How do I avoid double taxation by the federal government?
Because the the taxpayer had the HSA only for the last month of 2022, and did not have an HSA for all of 2023, TurboTax 2023 includes in income a portion of that contribution, resulting in triple taxation of the employer contribution.
What have I missed that would have avoided 2023 federal taxation of the amount included in 2022 income.
Thanks for your help.
