Contributed to both HSA and FSA in 2023

[gundminet]

Hi,

We contributed to FSA (spouse) and HSA (mine) in 2023.  I know I have to take the funds out from the account under over contribution.  

1. Do we amend 2023 or do something in 2024 tax filing?  (We filed with Turbotax)

2. Please provide instructions.

Thank you.

[Opus 17]

It is too late to make a corrective distribution for 2023.

For 2023, you need to file an amended return.  Report that you did not have qualifying HDHP coverage (because the FSA counts as "other coverage" that disqualifies you, even if you did have an HDHP).  Tell turbotax you will NOT remove the excess contribution (because it is too late).  Turbotax will add the excess contributions back to your taxable income plus assess a 6% penalty.  You will need to pay the tax and penalty with the amended return.

For 2024, tell us about your current situation.  Do you have both an FSA and HDHP for 2024?  Have you made HSA contributions or plan to make them?  What are your insurance plans going forward into 2025?

[gundminet]

For 2023, you need to file an amended return.  Report that you did not have qualifying HDHP coverage (because the FSA counts as "other coverage" that disqualifies you, even if you did have an HDHP).  Tell turbotax you will NOT remove the excess contribution (because it is too late).  Turbotax will add the excess contributions back to your taxable income plus assess a 6% penalty.  You will need to pay the tax and penalty with the amended return.

So I tried to do this but it was so confusing.  How do I check to ensure that it was done correctly i.e. the 6% excise tax applied?

For 2024, tell us about your current situation.  Do you have both an FSA and HDHP for 2024?  Have you made HSA contributions or plan to make them?  What are your insurance plans going forward into 2025?

For this year 2024, I plan on withdrawing all the contributions.  I am assuming I will also report that I do not have a qualifying HDHP so TT can add that back into my earned income?

For 2025, we will not have the unlimited FSA.  I will opt of a Limited FSA with my HDHP.   We should be good for next year. 

Thank you!

[gundminet]

For 2023, you need to file an amended return.  Report that you did not have qualifying HDHP coverage (because the FSA counts as "other coverage" that disqualifies you, even if you did have an HDHP).  Tell turbotax you will NOT remove the excess contribution (because it is too late).  Turbotax will add the excess contributions back to your taxable income plus assess a 6% penalty.  You will need to pay the tax and penalty with the amended return.

I attempted to do an amended 2023 again and TurboTax did warn me of the 6% tax.  However, I am stuck on these two questions.

If I select Family on the first one, it will up my allowable contribution to family limit.  On the second question (for December), it does not matter what I select, my taxable income remains the same.  During the review at the end, it appears that nothing has changed from the original filing and the amended filing. 

HELP please!

[Opus 17]

I can try and look at home later.  There may be a different worksheet.  Also, if you delete form 8889, and then run the interview, rather than using forms mode, you should be asked if you had qualifying insurance and you should say no.