On the page that says "You may want to withdraw money from your HSA," it says it looks like I have an excess contribution of $1,500! My balance in acct is $889. Why??

clh819 — Thu, 06 Jun 2019 16:02:34 GMT

My employer contributes $1,500 annually. I currently have a balance of $889. I used $660 and show that on my taxes. It's saying I have an excess contribution of $1,500. I don't think I have an HDHP, as my min. ded. is $1,500, but my max. ded. is $2,300. Why does it say I have an excess of $1,500??

Excess contributions happen when you (or your employer) a...

BMcCalpin — Thu, 06 Jun 2019 16:02:36 GMT

Excess contributions happen when you (or your employer) appear to contribute more money to your HSA in a year than your annual limit permits. It does not have to do with how much money you have in the HSA.

You probably have an HDHP, but confirm that with your HR department (since your company almost certainly set up the insurance plan).

As for the excess, it often happens that taxpayers accidently make entries to cause TurboTax to think that there is a problem when there isn't. Please read the following:

One of the purposes of the HSA interview is to determine your annual HSA contribution limit.

As you probably know, the maximum limits in 2017 are:

$3,400 - individual with self-coverage
$6,750 - individual with family coverage
If the HSA owner is 55 or older, then you add $1,000 to these amounts.

However, these limits assume that you were in an HSA all year. If you left the HSA during the year or started Medicare or had one of a number of change events, then the limit is reduced.

There are several major culprits for excess contributions (other than just actually contributing more than the limit).

First, if you did not complete the HSA interview - that is, go all the way until you are returned to the "Your Tax Breaks" page - the limit still might be set to zero, causes a misleading excess contribution message.

There are questions all the way to the end of the interview that affect the annual contribution limit.

Second, it is not unusual for taxpayers to accidentally duplicate their contributions by mistakenly entering what they perceive to be "their" contributions into the second line on the "Let's enter your HSA contributions" screen (see screenshot below).

Normally, any employee who made contributions to his/her HSA through a payroll deduction plan has the contributions included in the amount with code "W" in box 12 on the W-2. This is on the first line on this screen (above). Don't enter the code W amount anywhere on the return other than on the W-2 page.

Third, if you weren't in the HSA all 12 months, then the annual contribution limit is reduced on a per month ratio.

topic On the page that says "You may want to withdraw money from your HSA," it says it looks like I have an excess contribution of $1,500! My balance in acct is $889. Why?? in Deductions & credits

On the page that says "You may want to withdraw money from your HSA," it says it looks like I have an excess contribution of $1,500! My balance in acct is $889. Why??

Excess contributions happen when you (or your employer) a...