I finished 2023 with an excess contribution to my HSA due to an error made by my employer. This excess contribution carried over to 2024, and during the HSA interview I was asked if I will either: (1) Withdraw all of the excess contribution before 15 April 25; (2) Withdraw a portion of this excess contribution before 15 April 25 or (3) Make no withdraw of this excess contribution by 15 April 25 (but for the latter I'll be taxed at 6% of this excess contribution).
Regardless of the option I choose, an error is created because Form 8889 expects me to declare that I had an HDHP when I've already told TTX that I did not. This issue has been described by many others on this TTX community.
To resolve this form 8889 issue, I thought I'd respond to the HSA interview with option 1, which is to state that I will withdraw the HSA excess amount. But when I do so TTX throws an error, stating that it's too late to withdraw this amount (apparently I was supposed to have made this withdraw prior to the end of 2024, so why was it offered as an option).
So now I'm stuck in a loop where I cannot clear the error(s) in form 8889 no matter how I respond to the HSA excess contribution withdraw questions in the interview.
This scenario is very similar to that which others have reported with form 8889 when HSA excess contributions exist.
Based on recommendations from the community, I deleted form 1099-SA and went through the HSA interview again. But after doing so I have the same issue as described above. Not only that, TTX somehow auto-populated the HSA amount from form1099-SA, so my attempt to start all over entering HSA information was completely unsuccessful.
Questions:
(A) Why does TTX give me the option to withdraw the HSA excess contribution amount by 15 April 25, but if this option is selected TTX tells me it's too late to make this withdraw?
(B) If I choose to do nothing with the HSA excess contribution (and accept the 6% penalty), why doesn't TTX simply calculate the 6% penalty and allow me to move on rather than creating a host of errors in Form 8889?
(C) Why does it seem that I cannot completely remove the info from 1099-SA and start the HSA documentation process from scratch? There's no Code W in box 12 of my W-2 so I have no idea where the HSA account total is coming from when I deleted the 1099-SA form from TTX.
Thanks,
Scott
