Hello everyone,I realized I made an ineligible HSA contribution for the 2025 tax year and need guidance on correcting it before the filing deadline. My Situation:1/1/2025 – 12/31/2025: I had a Marketplace Silver Plan ($0 deductible, non-HDHP).9/1/2025 – 12/31/2025: I also had an Employer-sponsored HDHP.The Issue: Because I had the Silver plan for the entire year, I think I was ineligible to contribute to an HSA at all. Is that right? However, I contributed the full $4,300 individual limit. 😔My Questions:Removal Process (Optum Financial): I have the Optum "Excess Contribution and Deposit Correction Request" form. Do I simply list the full $4,300 for 2025? Does Optum calculate the "Net Income Attributable" (earnings/interest) automatically, or do I need to calculate that myself from my statements before submitting? TurboTax Reporting: How do I reflect this removal in TurboTax?Do I need to complete Form 8889?Where do I enter the "Excess" so TurboTax knows the money was pulled out before the deadline?Since this $4,300 was pre-tax, I assume I now need to report it as "Income" somehow, so it's taxed—how to report this?Thank you for the step-by-step help!

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fastesthorse

Level 2

Question

HSA Excess Contribution: How to withdraw the full individual limit and report it in TurboTax?

Forum|Forum|3 months ago
March 30, 2026
1 reply
215 views

Hello everyone,

I realized I made an ineligible HSA contribution for the 2025 tax year and need guidance on correcting it before the filing deadline.

My Situation:

1/1/2025 – 12/31/2025: I had a Marketplace Silver Plan ($0 deductible, non-HDHP).
9/1/2025 – 12/31/2025: I also had an Employer-sponsored HDHP.
The Issue: Because I had the Silver plan for the entire year, I think I was ineligible to contribute to an HSA at all. Is that right? However, I contributed the full $4,300 individual limit. 😔

My Questions:

Removal Process (Optum Financial): I have the Optum "Excess Contribution and Deposit Correction Request" form. Do I simply list the full $4,300 for 2025? Does Optum calculate the "Net Income Attributable" (earnings/interest) automatically, or do I need to calculate that myself from my statements before submitting?
TurboTax Reporting: How do I reflect this removal in TurboTax?
- Do I need to complete Form 8889?
- Where do I enter the "Excess" so TurboTax knows the money was pulled out before the deadline?
- Since this $4,300 was pre-tax, I assume I now need to report it as "Income" somehow, so it's taxed—how to report this?

Thank you for the step-by-step help!

Mike9241

Level 15

you are correct. You are not eligible to contribute any amount to an HSA due to being covered all year by the non-HDHP

in TurboTax go back to the HSA section and indicate none for the type of coverage for each month. Also, do not enter any info for 2024. Answer yes to the question of withdrawing the excess by 4/15/2026. To actually withdraw the excess, contact the sponsor for the exact procedure to follow to withdraw an excess contribution so a correctly coded 1099-SA will be issued early in 2027. You do not have to wait for it to file for 2025.

Mike9241

fastesthorseAuthor

Level 2

@Mike9241

Hi Mike,

Thank you so much for the instructions! I followed your steps in the desktop software and I have a follow-up.

Could you please take a look at my screenshots below to see if everything looks good?

All relevant steps:

I may have messed up here by touching this 2024 question as you advised not to touch it but I can't clear the radio button. Any way to clear it? Will this selection cause issue for me? (I didn't even have HDHP on 2024.)

Questions:

Q1. Does it all look good and can I submit it as is or do I need to first clear that 2024 selection somehow before I proceed? Please advise.

Thanks again for your help!

BillM223

Level 15

The question "Was [name] covered by a High Deductible Health Plan (HDHP) in 2025?" should be answered "No". Even if you had HDHP coverage, if you had conflicting coverage, you are considered to not have had HDHP coverage for purposes of calculating your annual HSA contribution limit.

This means that some of the rest the screens you should not see. You will see the situations screen - and no answer would appear to be correct.

Then you should see the excess contributions screens, and if you have the dollars in the HSA account, withdrawing the entire excess would be a good idea.

NOTE: the moment that TurboTax detects the excess (that is from the employer) then it adds the excess back to Other Income. YOU DO NOT HAVE TO DO ANYTHING.

When you call your HSA custodian, you should ask for a "withdrawal of excess contributions" (use this exact phrase), Also ask them to calculate your earnings...but many HSA custodians are refusing to do this for no good reason other than lack of customer service. Let us know if they won't calculate the earnings, and we will show you how to do it.

Then, sometime before the end of January 2027, you will receive a form 1099-SA. As Mike says, you do not put this into your 2025 return, but into your 2026 return.

If you did not have an HDHP policy in 2024, then it would be OK to leave that question about December 1, 2024 as "none".

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