We have a question about withdrawing excess HSA contributions due to accidentally signing up for both an HSA AND a general purpose FSA in 2023.
Details:
- My husband signed up for a HSA and Family Plan HDHP (for him and our son) in 2023, while I signed up for a general purpose FSA and a non-HDHP for the same year. D'oh!
- However, we didn't realize we'd messed this up until early 2024. Consequently, we withdrew ALL of my husband's employer-made HSA contributions for 2023 ($7,750) before 4/15/24.
- We also filed an extension for our 2023 taxes, just to give us more time to wrap our heads around how to correctly enter this info in Turbotax. We made sure to pay extra for the amount of tax we estimated owing for 2023, in order to account for that $7,750 of excess HSA contributions that weren't included as taxable income on my husband's W-2 for 2023.
- For the HSA interview portion of Turbotax, we indicated that my husband did NOT have valid HDHP coverage for the entire year, since we were both covered by my FSA. We saw in an earlier post that Turbotax will automatically add the excess contributions back to our taxable income if you do this - is that correct and if so, where should we be able to confirm that it did this?
- Under our HSA summary, the following is listed for my husband (the HSA-owner) in Turbotax:
Deduction: $0
Total distributions: $0
Taxable distributions: $0
Taxable earnings on excess contributions: $0
Taxable employer contributions: $0
Tax-free employer contributions: $0
Excess employer contributions withdrawn: $7,750
However, Turbotax will not let us file due to this error:
Form 8889-T: HDHP coverage check box needs to be checked to indicate the type of coverage held under a high-deductible plan during 2023.
Is this because my husband's W-2 still shows the $7,750 of employer contributions for 2023? Or is this a bug and we should we try clearing our forms and starting over?
Could you please advise on what we're doing wrong and how we're supposed to handle this in Turbotax? We have tried reviewing other posts about this and keep going around in circles. Thank you so much for your time!
