Is Turbotax Deadline to Correct HSA Excess Contribution in 2022 in 2023 Correct?

Forum|Forum|2 years ago
September 18, 2023
4 replies
59 views

I filled an extension for my 2022 taxes which gives me until Oct 16h, 2023 to file. I had excess employer and payroll HSA contributions in 2022. Turbotax states I must withdraw my HSA excess contribution amount between January 1 and April 18, 2023 to avoid additional tax of 6%. Everything I've read states I have until Oct 16th, 2023 to have my HSA administrator correct the excess contributions. Which I did June, 2023.

Question is if Turbotax software is correct that April 18th, 2023 is the last date to correct excess 2022 HSA contributions?

If the deadline is really Oct 18th, 2023, do I now click on "OK, I'll withdraw the full excess contribution by April 18th, 2023" when I really completed this action before Oct 16, 2023?

Thanks

Mike9241

Level 15

seems Turbotax is wrong. from PUB 969

You may withdraw some or all of the excess contribu-tions and avoid paying the excise tax on the amount with-drawn if you meet the following conditions.
•
You withdraw the excess contributions by the due date, including extensions, of your tax return for the year the contributions were made.
•
You withdraw any income earned on the withdrawn contributions and include the earnings in “Other in-come” on your tax return for the year you withdraw the contributions and earnings.

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from another source

One way to correct HSA excess contributions
Withdraw the excess funds. You can remove extra HSA contributions and income attributable to such excess by withdrawing them from your account before the deadline to file taxes. If you file for a tax extension, that date is considered the deadline.

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code section 223(f)(3)(A)(i)

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so with this goof in the app, I would answer yes/ok assuming you complied with both requirements - withdraw excess and income.

Mike9241

Kayla57Author

Level 2

Thanks, your answer was very helpful.

Kayla57

Kayla57Author

Level 2

This site is great for getting information on filing taxes and questions about Turbotax. My first question was answered the same day. The problem I'm having now is how to post other questions.

I did finally find a button "Make a Post" but it doesn't open a window for subject or message. I finally just replied to my first message to post this one.

Thanks