To summarize and make sure I’m understanding the steps (thank you for your patience btw!):
1. Make a qualifying HSA purchase equal to the exact amount of the earnings on the excess HSA contribution.
2. Claim that amount as nonqualifying distribution so I pay penalty on that for just the one tax year but at least avoid the year over year carryover.
3. Show the filed tax form 8889 to HealthEquity to let them know I already distributed the amount of earnings as no qualifying distribution and as such have them zero out the earnings in box 2 in the 1099-SA.
Since HealthEquity is not even allowing a return in earnings on excess/mistaken HSA, which should have been a straightforward thing, I’m not convinced they have the process in place to correct their tax forms.
Is telling them I’m rolling over to a different HSA more about influencing them to act or is that for me to figure out how to correct things with the next HSA administrator?
if that is the case, should I go ahead and rollover and switch to a new HSA administrator now to avoid all this headache? (Context: HealthEquity has already been sending me in circles for three weeks and refusing to return the earnings on my mistaken contribution.)
thank you, Kris!
