topic 1099-SA , Earnings on Excess Contributions in Deductions & credits

1099-SA , Earnings on Excess Contributions

sjranademilitary — Mon, 23 Feb 2026 10:36:12 GMT

In 2021, I made an excess contribution of $250 to my HSA account. In 2022, before filing taxes I withdrew that money. No contributions made in 2022 to the account. Later, I rolled over money in that HSA account to a new one. I just received 1099-SA for 2022. It shows Box 1(Gross Distribution): $ 250; Box 2 (Earnings on Excess Contribution): $1,500; Box 3 (Distribution Code): 2. How can I earn $1,500 on those excess $ 250? Is the amount of $ 1,500 taxable? Does my 1099-SA form has an error? If yes, how to get it corrected? Kindly help and explain.

Re: 1099-SA , Earnings on Excess Contributions

BillM223 — Sat, 21 Jan 2023 01:10:41 GMT

Yes, this situation can be corrected (assuming that the $1,500 in box 2 is a mistake). And, yes, you need to get this fixed, because otherwise you would pay tax on that $1,500.

I would certainly contact the HSA custodian (the bank or financial institution that gave you your debit card for the HSA), and ask them to verify these numbers. If you earned $1,500 on $250, why everyone would want to know how you were investing that money.

Let us know if you have any more questions on this.

Re: 1099-SA , Earnings on Excess Contributions

sjranademilitary — Sat, 21 Jan 2023 02:17:15 GMT

Thank you very much __/\__. I will contact the HSA provider.