My husband has two HSA's which he was careful not to over fund, but on the last day of the year, his employer put a surprise $500 into his account which made him go over the limit and thus the fun began. The bank received it 12/31/2021 but it hard posted on 1/4/2022 so the 5498 has the $500 plus his last payroll contribution of the year ($40) listed as 2022 for 2021.
The bank wouldn't let him do an excess funding withdrawal because he didn't exceed the limit at their bank ( but between their bank and the other bank, he did). He spoke to a bank rep who gave him some bad advice and he ended up filing some paperwork they recommended, which ended up with them sending the $540 back to his employer. Not allowed to do that per the IRS. They screwed up the new 5498 by taking that $540 out of the 2021 for 2021 amount (so it no longer matches the W2 box 12 amount) and still has $540 as 2022 for 2021.
What happens with the $540 sent back to the employer? Do we pay taxes on it as a non- medical withdrawal even though the money went to his employer? Pay the penalty for that as well as an overfunding penalty? How do we work this out on the 8889 form? The bank is not helping. They aren't going to correct the form. His HR department is not responding because they never do. We don't even know what they're going to do with the $540 they got back. Time is running out.
