Excess HSA Contibution

[am2347]

Hi, I had excess contribution for 2022. As I started the 2023 filing, the turbo tax software showed me the exact amount. I manually made the excess contribution 0 (as part of the question prompts). 4 days after filing the 2023 return, my HSA administrator completed the process of refunding excess returns. Do I need to file amended returns for 2023?

PS: income on the excess contribution was just about $3.

[BillM223]

"I manually made the excess contribution 0" - why did you do that?

OK, in the 2022 return, TurboTax told you that you had an excess HSA contribution of a few dollars, right? Did you tell TurboTax that you would withdraw the excess by the due date of the return?

So you just got the 1099-SA for the withdrawal of the excess from 2022? With distribution code of 2 and the vast earnings of $3 in box 2? When did you ask for it?

Well, the problem is that you would have undeclared income for your 2023 return, and if you are ever audited (not a common occurrence), you would owe the tax and penalties and interest from April 15th to the date of the audit. So, technically, you might want to amend your return. 

It might be a good exercise for you, while there's not a lot of pressure on. And, now, you can e-file your amended return, if I got the story right. On the other hand, if you amend your federal return, you also have to amend your state return if the federal change has any effect on the state.

[Mike9241]

Was the HSA contributions through your employer or did you contribute directly to it? different tax consequences.  the excess for 2022 should have been withdrawn by 4/15/2023. Apparently, you are saying it wasn't done until you started working on your 2023 return that would have been in 2024 which would make the withdrawal late.