Yes, you are correct, based on the information you provided, it looks like you have an over-contribution of $125 to your HSA. The discrepancy can either be due to an error in entering the contribution amounts, the coverages, or due to an over-contribution in a previous year. Let's check your HSA entries to make sure everything is correct:
- Enter your W-2s with the Code W in Box 12.
- This should have opened an area on your tax return for HSAs. If you do not see it, go to Federal > Wages & Income > Less Common Income > 1099-SA, HSA, MSA and click Start/Revisit.
- Make sure you both have HSA selected.
- If you made any withdrawals from your HSA, you should receive a 1099-SA and answer Yes to Did you use your HSA to pay for anything in 2021? Otherwise, select No.
- Assuming you did not inherit this HSA, select No.
- Under Let's enter your HSA contributions your employer amount should already be in there from the W-2. If you made any additional out-of-pocket contributions, enter them here. Do not re-enter any paycheck deferrals that were contributed to your HSA with pre-tax dollars. Those are already accounted for on your W-2s.
- If your employer made additional contributions not reported on your W-2, enter them on the next screen, Did your employer tell you about any other contributions? This is unusual.
- Answer the questions on the next two screens, making sure you answer the question related to your HDHP correctly. For yourself, enter self-only coverage all year and family coverage all year for your spouse.
- If you have over-funding from a prior year, this may have automatically carried over to this year. You can check your 2020 Form 5329, Line 47 to see if there is an excess contribution from last year.
