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bflax81
New Member

Health savings plan. I was in an HDHP for 2 months with an old employer. My new employer did not have a HDHP. Do I have to make an excess distribution for 10 months?

I maxed out my contributions in February 2017.  I left my company in February and in March joined a new company which id not have a HDHP.  Turbo tax said I have to distribute excess contributions for 10 months.  My new HSA provider said I don't have to since I was in a plan for at least one month.

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DanO
New Member

Health savings plan. I was in an HDHP for 2 months with an old employer. My new employer did not have a HDHP. Do I have to make an excess distribution for 10 months?

If you became ineligible in March, then the contribution for the 10 months from March through December would need to be removed to by April 17, 2017 to avoid a 6% penalty on the excess amount.

You should contact your HSA trustee to make known your desire to have the excess contribution removed.  This will trigger them to classify the transaction separately from qualified medical expense withdrawals.

You will receive an additional 1099-SA showing the excess contribution being distributed with a code "2" in box 3.  There should also be an amount in box 2 showing the Earnings amount.

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2 Replies
DanO
New Member

Health savings plan. I was in an HDHP for 2 months with an old employer. My new employer did not have a HDHP. Do I have to make an excess distribution for 10 months?

If you became ineligible in March, then the contribution for the 10 months from March through December would need to be removed to by April 17, 2017 to avoid a 6% penalty on the excess amount.

You should contact your HSA trustee to make known your desire to have the excess contribution removed.  This will trigger them to classify the transaction separately from qualified medical expense withdrawals.

You will receive an additional 1099-SA showing the excess contribution being distributed with a code "2" in box 3.  There should also be an amount in box 2 showing the Earnings amount.

bflax81
New Member

Health savings plan. I was in an HDHP for 2 months with an old employer. My new employer did not have a HDHP. Do I have to make an excess distribution for 10 months?

Thank you! That was my understanding as well.  I spoke to a representative at my new HSA who told me I did qualify for the entire year. I did not believe this was correct.
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