"On your W-2 in box 12 with a code of W, you had $1,020, correct? And you marked every month in 2025 as being on Medicare (or None), correct?" Correct to both questions.
"In this case, TurboTax should have told you on a custom screen in the HSA interview that you had excess contributions of $1,020 and asked you what you wanted to do with it." No, it never asked that question and that's where I think the problem is. When I had excess contributions in 2024, TurboTax 2024 did ask that question and I expected TT2025 to do that as well, but it did not. And TT2024 did treat that distribution correctly by adding it to my 2024 taxable income. The HSA summary screen shows:
- Deduction $0
- Total Distributions $5495 (Comment: I paid 2024 taxes on $4475 of this amount since I got the distribution prior to the 4/15/2025 due date.)
- Taxable Distributions $0
- Taxable Earnings on Excess Contributions $61
- Tax-free employer contributions $1020
- Excess employer contributions withdrawn $0
I've retried it many times and get the same result.
