I am attempting to enter my line 10 qualified HSA funding but it is not permitting me

[TK32]

I am not being asked the question what did I use my distribution for

[DawnC]

Go ahead and enter the 1099-R (I assume that you received a 1099-R with a distribution code of 7 and that the source was a traditional IRA).  Answer that you did "something else with it", and finish the rest of the 1099-R interview.   The income will show as taxable, but don't worry, taking the steps below will correct that.  

Now go to the HSA interview (if you need to, do a Search on hsa and click on the Jump to hsa link (Mac users must find HSA in the Topics List).   Put a checkmark next to HSA, then navigate through the interview until you see a screen titled "Let's enter [name]'s HSA contributions".   On the second line where it says, "Any contributions you personally made", enter the amount of the IRA distribution here.

This will cause the HSA contribution to appear on line 2 of Form 8889.  Now, this won't appear on line 10, but you will see that line 12 will be the same in either case, so your return will be monetarily correct.

The net result is that the 1099-R will be added to income on line 4b on Form 1040, and that same amount will be subtracted back out from income on line 12 on Schedule 1.  

One last thing, put a note in your tax file explaining what you did as a workaround in the unlikely event you receive an inquiry.   @TK32    I have edited my original response in which I did not take into account that you were reporting HSA contributions from a 1099-R distribution.   [Edited 02/19/2021 2:50 PM PST]

[TK32]

I appreciate the potential work around but I am concerned that you have asked me to add a note regarding the work around when my goal is to submit this electronically.

please correct the software to permit me to place the qualified ira funding to hsa distribution

line 10 

otherwise I have to print out all of the forms & manually write in

the $ 8000 line 10

there is also a line 19 

which lists qualified hsa funding distribution 

with the workaround 

entered on line 2 this is also blank 

please let me know when the software is corrected so that I might

enter the amount in the box

it was for

thank you for your help

[TK32]

I have tried entering the qualified HSA funding distribution in line 2.

I did not change the tax owed at all.

It did not increase schedule 1 line 12.

I would like to be able to enter the Qualified HSA Funding distribution 

on line 10 A Qualified IRA trustee to trustee transfer 

This is the financial transaction I executed in Jan 2020.

Why is the software not permitting me to enter distribution in the correct line?

[BillM223]

"I have tried entering the qualified HSA funding distribution in line 2.

I did not change the tax owed at all.

It did not increase schedule 1 line 12."

Are you saying that you did what I suggested as the workaround, that your 1099-R amount did not appear on line 4b on the form 1040, and that the amount that you entered as a personal contribution did not appear on line 12 of Schedule 1 (1040)? I have to assume that you did not do what I suggested.

"but I am concerned that you have asked me to add a note regarding the work around when my goal is to submit this electronically."

The workaround will not stop you from filing electronically. The reason I asked you to make a note of this was in case in the future you didn't remember why you did not enter the qualified HSA funding distribution on line 10.

"there is also a line 19 which lists qualified hsa funding distribution"

In your situation the qualified HSA funding distribution should not appear on line 19.

On your 1099-R, what was the distribution code on the form?

[TK32]

Hi,

I am struggling to follow the explanation . 

How do I find the HSA interview ?  

The toolbar at top does not include an interview option.

It only has , only

file, edit, view, forms, tools, online, & help.

I interpreted "go to HSA interview"  as

as look for HSA in  the forms topline bar option.

This brought up form 8889-T .

 I placed  the qualified HSA funding distribution $8000 in line 2 of form 8889-T,  is this correct ?

Only entering line 2 of form 8889-T leaves a red exclamation point on my forms in the return left side toolbar.

I also had to check Family in line 1 for family HDHP coverage

After doing the line 2 form 8889-T  I went to verify schedule 1 and it did not have the $8000 in line 12.

Where do I place the note for the IRS in my electronic filing ?

Thank you for your patience and understanding in helping me complete my return.

This is a several thousand $ problem if I can not include the 

Qualified HSA funding distribution.

Tom Kielty

[BillM223]

First, you go to the HSA interview by doing a Search (upper right) for hsa and clicking on the jump-to link (Mac users must find HSA in the Topics List). You can do this anywhere in the return.

Second, the red exclamation appeared because you did an "override", that is, you changed a number that was calculated by TurboTax. This nullifies the Tax Accuracy Guarantee, which is why we discourage taxpayers from doing it.

Please remove any overrides that you have done.

"This is a several thousand $ problem if I can not include the 

Qualified HSA funding distribution."

Third, I guess I have not made myself clear. If you do the workaround that I suggested, you will have the exact same tax as if the Qualified HSA Funding Distribution were reported in the "correct" way. That is, the workaround if NOT a several thousand dollar problem.

You see, if you do a Qualified HSA Funding Distribution, then the dollar amount of the 1099-R (the IRA distribution) is not reported on line 4b of the 1040, so you don't pay tax on it.

If you do the workaround as I described it, then the IRA distribution will be reported on line 4b, which increases your income, but then the HSA personal contribution will be reported on line 12 of Schedule 1 (1040), which carries to line 10a on the 1040, which will reduce your income back down to the level it was before the IRA distribution.

You see, you will owe exactly the same tax or have the same refund either way you do it.

Finally, when I told you to write a note to yourself and put it in your tax file, I meant your tax file at home, where you keep the paper copies of your tax returns.

Believe me, it is very unlikely that the IRS will ever notice this because they have so much other stuff to chase, and since the result is the same tax either way, if anyone ever asks, the IRS will understand.

[TK32]

Hi,

I type in HSA I get 4 options

1) overfund HSA

2) 5498 HSA

3) HSA excess

4) HSA interest 

Which of these 4 should I use to accomplish below?

"Now go to the HSA interview (if you need to, do a Search on hsa and click on the Jump to hsa link (Mac users must find HSA in the Topics List).   Put a checkmark next to HSA, then navigate through the interview until you see a screen titled "Let's enter [name]'s HSA contributions".   On the second line where it says, "Any contributions you personally made", enter the amount of the IRA distribution here."

What is the procedure to remove an override?

"Please remove any overrides that you have done."

Thank you for your help

[TK32]

Hi,

I type in HSA I get 4 options

1) overfund HSA

2) 5498 HSA

3) HSA excess

4) HSA interest 

Which of these 4 should I use to accomplish below?

"Now go to the HSA interview (if you need to, do a Search on hsa and click on the Jump to hsa link (Mac users must find HSA in the Topics List).   Put a checkmark next to HSA, then navigate through the interview until you see a screen titled "Let's enter [name]'s HSA contributions".   On the second line where it says, "Any contributions you personally made", enter the amount of the IRA distribution here."

What is the procedure to remove an override?

"Please remove any overrides that you have done."

Thank you for your help

[BillM223]

"I type in HSA I get 4 options

1) overfund HSA

2) 5498 HSA

3) HSA excess

4) HSA interest 

Which of these 4 should I use to accomplish below?"

None of the above. Type in hsa and then hit enter without choosing any of those suggested (but wrong) options.

"What is the procedure to remove an override?"

You might try back into Forms mode (upper right), go to form 8889, and enter the number in that red field (with the exclamation point) the number that was there before. 

But, honestly, I don't know if that will work.

If you can undo it, then please delete all your HSA data and re-enter it.

The way you do this is the following:

1. make a copy of your W-2(s) (if you don't have the paper copies)

2. delete your W-2(s) (use the garbage can icon next to the W-2(s) on the Income screen) (PS, to find the W-2s, do a Search on w-2, hit enter, and click on the jump-to link)

*** Desktop***

3. go to View (at the top), choose Forms, and select the desired form(s) (see #4). Note the Delete Form button at the bottom of the screen.

*** Online ***

3. go to Tax Tools (on the left), and navigate to Tools->Delete a form

4. delete form(s) 1099-SA (if one), 8889-T, and 8889-S (if one)

5. go back and re-add your W-2(s), preferably adding them manually

6. go back and redo the entire HSA interview.

This will remove any overrides for sure and let you start over.