I called the HSA custodian. There is no code in 1099-SA that has mistaken contribution as a choice. So they cannot modify the 1099-SA to a non-existent code. I then asked how they would treat a mistaken contribution differently than an excess contribution. They said they do not have another process.
So I am trying to understand what you are suggesting "ask if they will recharaacterize your qualified HSA funding distribution as a mistaken contribution". from distribution code "2" to ?
• 1 (Normal distributions):
• 2 (Excess contributions): This code refers to excess HSA contributions that were distributed back to you (the accountholder).
• 3 (Disability):
• 4 (Death distribution):
• 5 (Prohibited transaction): This code refers to a prohibited transaction made using HSA funds (see questions 34 – 37 on IRS Notice 2008-59 for a list of prohibited HSA transactions).
• 6 (Death distribution after year of death to a non-spouse beneficiary):
If you mean code 5, according to the IRS, this was meant for employer contributions, not qualified distributions. Can you clarify what you meant?
