My contribution to HSA was $4017. The limit for an individual in 2024 was $4150. Why is TurboTax calculating a $241 penalty?

[MindyB]

It seems that you are being penalized for the entire amount of your contribution ($4,017 x 6% penalty rate= $241).  Make sure that you have indicated you have a high deductible health plan.

Here's how to do this in TurboTax Online:

• Click on Federal Taxes,  Deduction & Credits
• Choose "add/edit" HSA, MSA Contributions
• You will see a page titled "Your HSA Summary" which will show any deductions already computed from your W-2  
• Choose Edit, Check the box for HSA, Continue
• You'll now see a screen that says "Here's what we have so far" with the information from the 1099-SA, choose "Edit"
• Continue until you get to a screen that says "Let's enter your HSA contributions"
• In the box "Any contributions you personally made (not through your employer)" don't enter the amounts you contributed through paycheck withholding. It has already been considered through your W-2 entry.
• Continue on
• Next, you will be asked if you were covered by a High Deductible Health Plan (HDHP) in 2024? You need to have been covered the whole year to be allowed to make the maximum HSA contribution, so make sure you choose yes if you were.