I’ve had an overfunded HSA since 2021 due to an employer contribution made during a job change. I missed the correction window that year, so the excess carried forward for several years. In 2024, I finally contacted my HSA custodian and requested a return of excess contribution. They issued a 2024 Form 1099‑SA with Code 2 for the exact excess amount (plus earnings).
I expected that entering this 1099‑SA on my 2024 tax return would automatically clear the excess. However, while preparing my 2025 taxes, I discovered that the excess was still shown as existing on my 2024 return.
I tried amending the 2024 return to fix this, but TurboTax will only zero out Form 5329 Line 48 if I classify the withdrawal as something other than the actual Code 2 reported on my 1099‑SA.
Has anyone run into this? Is there a correct way to clear a prior‑year HSA excess in TurboTax while still reporting the 1099‑SA exactly as issued?
