Is it allowable for them to make this adjustment since my contribution was prior to tax deadline?

[dmertz]

Without a documented error on the part of the custodian, there would be no way to distinguish a mistaken designation on the part of the individual from an intentional designation for the current year and the individual later deciding (after the due date of the prior-year tax return) that they would like to have made an HSA contribution for the prior year.  Allowing the contribution to be re-designated under these circumstances would effectively be allowing the individual to make a contribution for the prior year after the due date of the tax return for the prior year.

[Opus 17]

If the bank previously has an online form that did not allow the designation, but the online form now does have the designation, that could potentially allow an argument that the interface was ambiguous.  On the other hand, if there was a FAQ or instructions on the web site that specifically said "contributions for prior year can only be made by check and you must use the specific form" then that would allow the bank to argue that the customer didn't follow the clear and unambiguous rules.

Bottom line, if the bank won't recharacterize the contribution (no matter what their argument is) the taxpayer either has to sue the bank, or amend their tax return.  I doubt that suing the bank is productive or cost-effective.

[brs54321]

I was able to contribute more because I changed from single to family insurance. I wasn't aware of this requirement. Yes, a mistake but unknown and not easily found. I found this out because my 2018 was maxed but shouldn't of been. I don't follow you. I made the contribution in February, I didn't make it in May and try and get it changed.

[Opus 17]

If you had realized before April 15 that the bank had not characterized your February deposit the way you wanted them to, you might have had more options to correct the mistake.

As it is, if the instructions were clear and you didn't follow them correctly, I don't see how the bank can recharacterize the deposit for you.  You would have to show that the bank made a mistake, or that their instructions were so unclear that you could not reasonably follow them.

[brs54321]

The instructions are clear but they are hidden. They are a holder who sends out all info to the IRS. I'm responsible for my tax situation thus when I was unable to find anything on the website except a hsa contribution page that allows a deposit, I thought I was responsible for accounting for it. Now, I'm finding out that the online deposit should of had a prior year box but didn't at the time. I have proof so maybe you're wrong. I can tell by your response you've never been wrong

[Critter]

Don't get mad at us for a circumstance we have nothing to do with ... please direct your attention to the bank ... they are the ones you need to convince not us.  Again ... good luck.

[Opus 17]

The bank has to follow IRS regulations and the law, or be penalized (up to and including having their right to host HSA accounts be taken away).  You need to show to that bank that they made a mistake, so that they can recharacterize the deposit without violating IRS regulations.  Maybe you could also try and show that their rules and procedures were unclear so that a reasonable person could not follow them.  Otherwise, you need to sue the bank.  It has nothing to do with me.  

[brs54321]

I'm not mad. I asked a tax question that I was unable to find a direct answer to online or with my benefit wallet. I found more of the same except many pointing out how this is my fault, how the instructions are clear, how they shouldn't change the code or responses like good luck, take it up with the bank. Not much help for a question as I've been taking it up with the bank.

[brs54321]

I don't think it does either. This response helped other than nothing to do with you part. I'm not an expert on hsa rules and only could contribute more because of life event. Thsnks and good luck to you