dmertz
Level 15

Deductions & credits

What you described seems correct.  The amount of the excess HSA contribution for the previous year was not excluded from income that year, so applying it as part of her contribution for this year makes it deductible this year.  See the instructions for Form 8889 line 13 regarding "Deducting an Excess Contribution in a Later Year."

 

https://www.irs.gov/pub/irs-pdf/i8889.pdf