I was making HSA contributions for all of 2017 but was no longer on a HDHP. Therefore, I had $920 in HSA excess contributions and have withdrawn this amount prior to filing 2017. My understanding is that I will not be penalized the 6% since it was withdrawn in time. Do I need any updated forms for 2017 before I file (w2, 1099, 8889) to properly reflect this? Or will this be reflected when I file next year? My 2017 W2 has $920 in box 12 and my 1099 has $875.09 in box 1 Gross Distributions and $0 in box 2 Earnings on excess contributions Box 3 has code 1 Normal Distribution.
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If you answered the HSA interview questions correctly and indicated that you will withdraw the funds before April 17, 2018, then there is nothing to update in your return.
The Form 8889 will be updated to reflect that you have withdrawn the funds and no penalty will be calculated. You can verify that there is no penalty by previewing line 59 on your 1040. Select Tax Tool, Tools, View Tax Summary, then select Preview my 1040 from the left black panel.
Note: Be certain to check with your HSA custodian to verify that the funds are scheduled to be withdrawn before you file.
If you answered the HSA interview questions correctly and indicated that you will withdraw the funds before April 17, 2018, then there is nothing to update in your return.
The Form 8889 will be updated to reflect that you have withdrawn the funds and no penalty will be calculated. You can verify that there is no penalty by previewing line 59 on your 1040. Select Tax Tool, Tools, View Tax Summary, then select Preview my 1040 from the left black panel.
Note: Be certain to check with your HSA custodian to verify that the funds are scheduled to be withdrawn before you file.
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