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Can you explain why TurboTax says we exceeded the HSA contribution by $6000 when we contributed $6999? We are both over 55 and checked family plan.

The allowable for our age is $7750 and we contributed under that amount. Why are we exceeding our limit? Did I miss something?
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Level 13

Can you explain why TurboTax says we exceeded the HSA contribution by $6000 when we contributed $6999? We are both over 55 and checked family plan.

As you obviously know, the maximum limits in 2016 are:
  • $3,350 - 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 [name] 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 add this amount again during the HSA interview.

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

With your numbers, may I guess that the number on the W-2 in box 12 with a code of "W" is $6,999? And that you contributed $6,000 of it through a payroll deduction plan?

If so, going back to point 2 above, please do not enter the $6,000 again as your contribution on the screenshot below, because you will see that it is already included on line 1 on that screen.

If it is not this, please go through the HSA interview again and see if you somehow indicated that you had a carryover excess contribution from 2015, or if you indicated that there were some months in which you were not in the HDHP as the Family plan.

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