@Craig55 wrote:
In 2020, I made an excess HSA contribution of $4050. Turbotax generated a 5329 form which charged me the 6% penalty. The $4050 was carried over to 2021 and I was again charged the 6% penalty. Then for my 2022 taxes I expected to see the $4050 carried over again, but it was not. There was no 5329 form generated, no 6% or 20% penalty. It seems the penalty does not go on forever, just two years, according to Turbotax. Am I missing something?
That depends. Have you spent the account down to zero? Do you have HSA eligibility that allowed you to use up the excess? For example, if you were eligible in 2022 but did not make contributions, that would absorb the excess. However, it would still show that on form 5329. It's also possible you started a new Turbotax account by mistake and didn't transfer last year's information. There are questions about prior year excess during the HSA interview, how did you answer them? Did you have your 2021 form 5329 available to answer the questions?
Ultimately we can't see your return. If you had form 5329 in 2021, you would have to also have form 5329 in 2022, unless line 48 from 2021 was zero, indicating you used up or zeroed out the excess in 2021.
