Did not know until signing up for Medicare at the end of 2023 that this made me ineligible to use an HSA for the last 6 months of 2023. Total was included under box 12c with code W on the W2. Married, over 65.
I asked custodian to remove the excess, and they calculated and did so before the end of 2023. They reported Gross distribution in 1099-SA as 3,715 with a distribution code 2 for excess contribution. I believe they removed the amounts from each pay period after 6/30/23 until the error was recognized and calculated interest.
Turbotax calculated that I could have contributed more for the 6 months I was eligible and wants to add only 2331 to my taxable income. I have paid medical expenses which could cover the difference, but I'm concerned that the difference between the 1099-SA with a distribution code of 2 for excess contribution , and the lower additional taxable income reported by Turbotax is a red flag to the IRS ?
Thank you in advance for your time and advice
