I withdrew some funds from my HSA in March 2019 due to an excess contribution in 2018. I believe that distribution should be taxable, right? The software says it's not.

deladron1 · ‎March 15, 2020

I had two 1099-SA forms for 2019. One was for regular distributions that I used to pay for medical expenses. One was for this excess contribution withdrawal that was not used for medical expenses. However, the software doesn't ask me whether I used the excess contribution distribution for medical expenses and it shows that none of my distributions are taxable.

dmertz · ‎March 15, 2020

A return of excess contribution is reported on a code 2 2019 Form 1099-SA. For a code 2 Form 1099-R, only the amount in box 2 is included as other income. If the excess contribution was made through your employer, the excess amount itself should have been taxed as other income on your 2018 tax return.

I withdrew some funds from my HSA in March 2019 due to an excess contribution in 2018. I believe that distribution should be taxable, right? The software says it's not.

Retirement tax questions