If neither of you had an HDHP, any contribution to her HSA by her employer would not be allowable. You will have to enter all the information in the HSA section of your return:
- Go to Federal > Wages & Income > Less Common Income > 1099-SA, HSA, MSA and click Start/Revisit.
- Make sure she has HSA selected.
- If you made any withdrawals from your HSA, you should receive a 1099-SA and answer Yes to Did you use your HSA to pay for anything in 2021? Otherwise, select No.
- Assuming you did not inherit this HSA, select No.
- Under Let's enter your HSA contributions her employer amount should already be in there from the W-2. If you made any additional contributions, enter them here. However, if your employer made additional contributions not reported on your W-2, enter them on the next screen, Did your employer tell you about any other contributions?
- Answer if she had Medicare.
- Answer Yes, I was covered by an HDHP during at least one month during 2021 to Was your wife covered by a HDHP in 2021? and then I had different plan types at different times of the year. Then select None for every month.
- After asking about prior year over-funding, the system should alert you that you over-funded by the amount her employer contributed and you can make the withdrawal by April 18, 2022 in order to avoid the penalty.
Once you fill it out this way, you may still get the line 1 error. At this point, you can select self-only. It will not change anything because it calculates the contribution limit based on not having coverage for any month.
If your wife's employer does contribute to her HSA and provides her health insurance, you may want to double-check to ensure it does not qualify as a high deductible health plan. If she did not have coverage, the contributions are subject to a 6% penalty each year they remain in the HSA. If she does withdraw the amount, make sure the HSA is notified that it is for excess contributions so they can code the form that she will get for next year's taxes correctly.
