Deductions & credits

You have some things confused, I think.

 

A return of an excess withdrawal is not a contribution.  Your HSA bank may accept the money back as a return of an excess withdrawal or reimbursed expense.  (They are not required to do this, but you can ask.  It will require a special form and is not a regular deposit or contribution.)

 

If the bank won't accept the return, you have two choices.

1. Remember that if you have funds in an HSA, you can use them for medical expenses even if you aren't allowed to make new contributions. If you have medical expenses this year, pay them from the reimbursement instead of making a new withdrawal from the HSA.

 

2. Report the reimbursement as taxable income, since you never paid tax on the money before on condition it would be used for medical expenses, if you keep it now it's taxable.  There's a section in Turbotax for other uncommon income and one of the options is a reimbursement of a previous deduction. 

 

 

 

 

A reimbursement of a previous tax benefit is called a "taxable recovery."  You would report it as taxable income (since it is a reimbursement of money you never paid tax on, and is not being used for a medical expense.). There is a section under "other income"