BillM223
Expert Alumni

Deductions & credits

Let me start by addressing 2018. 

 

When you did your 2018 return, you got the excess contribution message in TurboTax, right? And you told TurboTax when it asked that you would withdraw the excess contribution before April 15, 2019, right? And TurboTax added the excess back to your income (on line 21 of Schedule 1) as Other Income, right? Or did you not withdraw the excess and form 5329  was added to your return to assess the $11 penalty?

 

If all this is true, then tax year 2018 is OK.

 

Now for 2109. TurboTax has told you that you have an excess contribution of $1,800. Did you withdraw the $180 in early 2019 for 2018 or did it carry over to 2019?

 

NOTE: if you see the question "Did you make excess contribution in 2018 (on your 2019 TurboTax interview) AND you withdrew the excess $180 before April 15, 2019, then answer NO to this question. You "cured" the excess contribution by withdrawing it. You carry over an excess contribution ONLY when you don't withdraw it in time.

 

When TurboTax tells you in the 2019 interview that you have an excess contribution, then if you withdraw it all before April 15, 2020, the excess contribution is cured. The amount ($1,800) is added to Other Income, and the matter is done with. IN THIS CASE< you will not have to enter anything about the excess on the 2020 tax return.

 

But if you can't withdraw the entire excess before April 2020, then the part that you cannot withdraw this year will carry over to next year.

 

As for year 2020, it depends very much on what you did previously. The $150 that the employer took back should not generate a 1099-SA, unless they already sent you one, in which case they owe you a corrected 1099-SA.

 

If, however, you did not withdraw the entire excess from 2019 before the due date of the return, then you will need to claim that you have an HSA and fill out the interview. You will be penalized on form 5329 ONLY if you still have money in the HSA, to the greater of the penalty or the amount in the HSA.

 

 

Now, I am not sure what you did with the excess contributions in early 2019 and early 2020, so my discussion may not exactly match what you're seeing. If this doesn't make sense, then please give me more details:

  • in early 2019, did you withdraw the excess $180 or carry it over to 2019?
  • In early 2020 ((i.e., now), do you plan to withdraw the excess $1,800 before April 15th? Can you?

Let us know what you did.

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