Thank you, Opus 17, for your detailed reply. Here are the answers to your questions.
Have you spent the account down to zero?
NO
Do you have HSA eligibility that allowed you to use up the excess?
NO I started Medicare in July 2020.
It's also possible you started a new Turbotax account by mistake and didn't transfer last year's information.
NO, I used the same account login ID and password, and it did 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?
YES
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.
2020 Form 5329, Line 48: $4,050 ($8,100 contribution, $4,050 excess)
2021 Form 5329, Line 48: $4,050
2022 Form 5329, Line 48: Form not generated.
Other Info:
I took a 2022 HSA distribution of $5,574 for qualified medical expenses, so the taxable distributions were $0. I thought this might be affecting the excess distribution carry-over so I did a Turbotax experiment changing the $5,574 to 0$. There was no change in the result. Form 5329 was not generated. No 6% or 20% penalty was charged.
I appreciate your help.
