Turbotax puts an entry for Wisconsin 2022 HSA Smart Worksheet on Line 4 from the dialog (distribution from years 2011 - 2021) and correctly subtracts from line 3 and places a 0 in Line 5 because line 4 is larger than Line 3 and no deduction is to be had. HOWEVER, the software says "TP Amount Distributed is too large." I can either reduce the amount significantly or turn it into a negative number and Turbotax is happy, but the figures are incorrect. I have checked the amounts via more than one calculation method and am not sure why Turbotax even cares that the amount of distribution for that string of years is far more than the piddly amount I had in the account in 2010.
I just want to be able to finish and file, this is the last step before I can file. Thanks for any help. I can send a screenprint.
I found an answer buried in the stack from the same error in a previous year. The solution is interpreting the question regarding HSA distribution for years 2011 - 2021 to mean "what portion of those distributions applied to the 2010 HSA balance and how much of these were for valid medical expenses and how much were non-medical and should be taxed". Here is a copy of the answer, thanks to Bill M.
"BillM223
Employee Tax Expert BillM223
Employee Tax Expert
February 16, 2022 7:22 PM
If you made contributions to an HSA prior to 2011, Wisconsin did not permit the deduction of such contributions. However, subsequent to 2010, Wisconsin passed a law that enabled you to make adjustments to your current income in order to simulate taking the HSA contributions prior to 2010.
NOTE: this applies ONLY if you were in Wisconsin prior to 2011, filing a state return, and contributing to an HSA at the federal level. If not, leave the section blank and continue.
See the screenshot below. The first line asks you for the value of your HSA in 2010, less distributions made in 2011, 2012, 2013, and 2014.
The second line asks for your HSA distributions in 2021. Note that this is all expenses (even perhaps for non-medical ones).
The third line asks for which of the 2021 distributions were for qualified medical expenses...BUT you are expected to enter no large than the amount in the first line - that is, it is really asking for "what part of the remaining pre-2011 HSA value did you distribute in 2021 for qualified medical expenses?" Viewed this way, because you are charging off some of the 2021 distributions against it the remaining pre-2011 HSA value, it's clear that you can't use more then the remaining pre-2011 HSA amount in 2021 for this purpose.
Just limit the third entry to be no larger than the first entry, and the return will be correct.
In your case, enter zero.
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I found an answer buried in the stack from the same error in a previous year. The solution is interpreting the question regarding HSA distribution for years 2011 - 2021 to mean "what portion of those distributions applied to the 2010 HSA balance and how much of these were for valid medical expenses and how much were non-medical and should be taxed". Here is a copy of the answer, thanks to Bill M.
"BillM223
Employee Tax Expert BillM223
Employee Tax Expert
February 16, 2022 7:22 PM
If you made contributions to an HSA prior to 2011, Wisconsin did not permit the deduction of such contributions. However, subsequent to 2010, Wisconsin passed a law that enabled you to make adjustments to your current income in order to simulate taking the HSA contributions prior to 2010.
NOTE: this applies ONLY if you were in Wisconsin prior to 2011, filing a state return, and contributing to an HSA at the federal level. If not, leave the section blank and continue.
See the screenshot below. The first line asks you for the value of your HSA in 2010, less distributions made in 2011, 2012, 2013, and 2014.
The second line asks for your HSA distributions in 2021. Note that this is all expenses (even perhaps for non-medical ones).
The third line asks for which of the 2021 distributions were for qualified medical expenses...BUT you are expected to enter no large than the amount in the first line - that is, it is really asking for "what part of the remaining pre-2011 HSA value did you distribute in 2021 for qualified medical expenses?" Viewed this way, because you are charging off some of the 2021 distributions against it the remaining pre-2011 HSA value, it's clear that you can't use more then the remaining pre-2011 HSA amount in 2021 for this purpose.
Just limit the third entry to be no larger than the first entry, and the return will be correct.
In your case, enter zero.
**Join us for our "All about the refund" event, sign up here
**Mark the post that answers your question by clicking on "Mark as Best Answer"