Doing my once-in-a-lifetime IRA to HSA. withdrew 12/30 for tax year 23, deposited in Jan, 1099-R dtd 2022 so TT reports excess 22 contribution instead of 23. options?

[BillM223]

So you initiated this transfer in 2022? You don't get to do future operations on HSAs. You can only look back on certain operations like making contributions to a previous year.

So it appears that the IRA administrator was correct to date the transfer as 2022, which caused the excess contributions for 2022.

Your option (may or may not work) is to ask the IRA administrator to undo the IRA to HSA Funding Distribution and instead send you the money, and you can manually contribute the money to the HSA yourself. But if the IRA administrator has already sent the money to the HSA custodian, they probably can't/won't do this.

Do you really initiate this transfer on December 30, 2022, or did you contact the IRA administrator on December 30 and ask them to do the HFD (HSA Funding Distribution) after the 1st?

[dmertz]

Were you under age 59½ on 12/30/2022?

[dapintuitdap]

advice I got from broker was that this was a rollover and not a contribution so no tax implication.

[dapintuitdap]

no

[DaveF1006]

The problem with your broker's advice is that the HSA rollover cannot be more than the allowed contribution to your HSA. In 2022, you can contribute up to $3,650 if you have health coverage just for yourself or $7,300 if you have coverage for your family. If you are over the age of 55, there is a $1000 additional contribution that is allowed.  

What you might do is to request your broker return the excess contribution to the HSA.  If you file an extension for your return and pay all taxes due 9if any), you have until October 18, 2023 for that excess contribution to be returned to you.. If the return contribution is returned before Oct 18, you can go back to that question that asked if the excess was removed by April 18, here you will say yes.  

For 2023, you should receive a taxable document reporting the excess contribution returned, which include the earnings and you can wait until then to report the earnings. The excess earnings amount will be reported in 2023 in a 1099-SA, with the amount of the original excess in box 1, the earnings in box 2, and a '2' distribution code in box 3.

@dapintuitdap 

[dmertz]

I assume that "no" was the answer to my question asking if you were under age 59½ at the time of the distribution.  If so, it makes little sense to do an HSA Funding Distribution because the main purpose of an HFD is to avoid an early-distribution penalty on the IRA distribution.  After age 59½ there is no early-distribution penalty no matter what you do with the money distributed from the IRA.

Simply indicate to TurboTax that this money was not transferred to an HSA and enter a regular personal HSA contribution for 2023 of this amount when you prepare your 2023 tax return next year.  The IRA distribution will be taxable on your 2022 tax return but the HSA contribution will be deductible on your 2023 tax return.