BillM223
Expert Alumni

Deductions & credits

Some thoughts:

"My wife and I were a part of a family HSA through my employer last year which included employee contributions. " - it is your HDHP coverage that is Family coverage (I assume that you had Family coverage). An HSA is always owned by an individual, either you or your spouse (and yes this means that each of you can have a separate one if you are under HDHP overage).

 

"Since then, the HSA provider has closed our original account and moved the funds over to a new account." - why did they do that? It's your account, just like how an IRA is yours and not any employer's. Are you saying that the HSA opened a new account in your name and moved your HSA money to it? 

 

As for your wife's new health insurance, is it also an HDHP?

 

"We have been trying to use all the funds in that account in order to consolidate." - if you find yourself with two HSAs, you can "consolidate" at any time by asking the first HSA custodian to do a trustee-to-trustee transfer of the funds in the first HSA to the HSA account held by a second trustee. This is often called a "rollover". You can do this at any time and it will not count as a contribution to the second HSA. Of course, if you want to spend all the money from the first HSA first, you can...it's just that if you want to consolidate in order to make your balance larger for investment purposes, all you need to do is call the first HSA custodian and asked that the money be transferred.

 

"I was notified by the HSA last week that apparently we overcontributed last year by ~$900." - I don't know what this means. The HSA custodian has no idea what your personal tax situation is so they actually should have no idea if you overcontributed or not. 

 

Was this supposedly for 2020? What were your "employer" contributions (i.e., the code W amount in box 12 on your W-2(s))? And how much did you contribute directly (i.e., not through your employer)? Did you carry over an excess HSA contribution from 2019? And did you have Family HDHP coverage for all of 2020? And what is the age of the person who owns the HSA?

 

We need to know a lot more about your situation before we can suggest any course of action.

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