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Deductions & credits
No, the $1,500 is not considered a contribution for your HSA. You already got the tax benefit when you contributed the $1,500 the first time; you cannot double-dip.
You need to report to your HSA custodian the original $1,500 pay out as a "mistaken distribution" (that is, you should not take money out that is going to be reimbursed by insurance - yes, I realize that you did not know this at the time).
1. Contact your HSA administrator and tell them that you had a mistaken distribution (use that phrase). You may be able to report this through their website (go look).
2. Complete the mistaken distribution form and send it to the HSA administrator.
3. Also send the HSA administrator a check for the amount of the mistaken distribution.
The HSA administrator should send you a corrected 1099-SA to account for this "distribution".
Note: the HSA administrator does NOT have to accept your application for a mistaken distribution, so be nice (let them know that you have no reason to expect this refund). This is what the IRS says:
"As the trustee or custodian, you do not have to allow beneficiaries to return a mistaken distribution to the HSA. However, if you do allow the return of the mistaken distribution, you may rely on the account beneficiary's statement that the distribution was in fact a mistake. .... Do not report the mistaken distribution on Form 1099-SA. Correct any filed Form 1099-SA with the IRS and the account beneficiary as soon as you become aware of the error." See the 1099-SA instructions.
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