I have excess HSA contributions from 2023, but no HSA in 2024 -- How do I file Form 8889?

[Pelican25]

We overcontributed to our HSA in 2023 and need to pay the 6% tax on the overcontribution this year. We haven't had an HDHP since mid-2023, so TurboTax is having a hard time with our filing. 

Do I need to file Form 8889? We didn't make any contributions, and we didn't take any distributions from the HSA either. I keep getting an error for checking a box in Form 8889, but neither myself or my husband had HDHP coverage in 2024. 

[LindaS5247]

Whether you need to file a Form 8889 depends on how your prior-year excess was handled. Was your excess removed? When was your excess removed?

You will need to report the withdrawn amount and earnings as taxable income on your tax return for the year of the withdrawal. 

You also would have had to contact your HSA plan provider to withdraw your excess funds. 

Your HSA provider will issue a 1099-SA form, which you'll need to include with your tax return to report the distribution. 

If you do not correct the excess contribution before the tax filing deadline, you will be subject to a 6% excise tax each year until the excess amount is withdrawn. 

You must always file a Form 8889 in any year you or an employer contributes money to your HSA or you make withdrawals from the account. 

If you found out that you over-contributed to your HSA before the tax filing deadline (April 15, 2024), you would have avoided a penalty from the IRS if you took the extra money out before filing your taxes. You also would have to remove any interest you have made from your excess contributions. If this was done, than your error was corrected.

You can go back to your HSA entry screens in TurboTax to review your answers as follows:

1. Click on "Search" in the top right of your TurboTax screen
2. Type "hsa" in the search box
3. Select "Jump to hsa"

Click here for "What Is the IRS Form 8889?"

Click here for more detailed information regarding HSA contributions.

Click here for "What is a Health Savings Account?

Click here for "Why am I showing an excess HSA contribution?"

[Pelican25]

I wasn't aware that we had overcontributed until we were preparing our filing! So the excess amount is still in the account and we'll just have to pay the tax. That's fine. 

If we didn't remove the excess, didn't contribute in 2024, and didn't take any withdrawals from the account, do we need form 8889? It sounds like we don't need to because the excess is reported in form 5329?

[BillM223]

Yes, so long as that excess is being carried over, it is considered a "personal contribution" to your HSA so you have to have an 8889.

Please see my answer to you on your other post here.