HSA Excess Contribution: Spouse has Medical FSA. How to answer HDHP coverage question?

Forum|Forum|4 months ago
March 12, 2026
1 reply
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Hi everyone, I have a specific situation regarding HSA eligibility and reporting excess contributions in TurboTax (filing MJT).

The Situation:

HDHP Coverage: I was enrolled in an HDHP through my employer from January 2025 through August 2025. I switched to a non-HDHP plan with a new employer in August 2025.

The Conflict: My spouse had a General Purpose Medical FSA for the entire 2025 year. Since we file jointly, I understand that his Medical FSA makes me an "ineligible individual" for HSA contributions for the entire 2025 tax year, despite having an HDHP card for 8 months.

Contributions: My W-2 (Box 12, Code W) shows a total contribution of $2,486.

Withdrawals/Corrections: I have already processed a "Correction of Excess" with my HSA providers and have 1099-SA forms with Distribution Code 2 totaling $2,440. (The small difference is due to a medical distribution earlier in the year).

The Question: TurboTax asks: "Was [Name] covered by a High Deductible Health Plan (HDHP) in 2025?"

Technically, I had the plan for Jan 2025 - Aug 2025, but legally I was ineligible to contribute because of my spouse's Medical FSA.

(1) Should I: Select "No" to this question to immediately flag the entire $2,486 as an "Excess Contribution"? Or select "Yes" and then Turbotax takes me to a second screen: "Tell us about [Name]'s HDHP coverage for 2025." This second screen has a grid for all 12 months with a dropdown menu for each:

None
Self plan
Family plan

(2) If I select "Yes" and mark the months I actually had the HDHP (Jan-Aug, Self plan), the software tries to give me a partial contribution limit, which is incorrect because the FSA disqualified me for the full year.

(3) What is the best way to handle the "Spouse FSA" disqualification in the TurboTax workflow so that my 1099-SA (Code 2) is applied correctly against the total excess?

To Summarize my questions: Since the spouse's Medical FSA technically "disqualifies" my HDHP coverage for HSA purposes, is it better to just say "No" to the first question (even though I had a HDHP for Jan-Aug 2025)? Or should I say "Yes" and then select "None" for every single month in the grid?

Opus 17

Level 15

The answer to the insurance question is "none" for the entire year because you were not considered eligible -- although you were in an HDHP, you were ineligible for other reasons.

You need to remove the entire $2486 if there is that much money in the account, even if you withdrew some. But if the $2440 was the only funds and you emptied the account, that will also satisfy the situation.

When you answer none, the program will ask something like "will you remove the excess" and you will say yes. That should take care of it. If the $2440 included interest, that is reported separately. For example, if you removed $2435 of excess funds and $5 of interest, you would report the removal of $2435 and report the $5 as bank interest.