How to report earnings from excess HSA contributions without 1099-SA

[user17738757212]

I have already withdrawn excess HSA contributions for 2025 from my custodian. I also know the earnings from that excess contribution. However, I will not have 1099-SA until next year. I am not sure how I put these earnings number in turbotax. Do I report it as 'Other income not already reported on a Form W-2 or Form 1099' in Miscellaneous income section? When I did this, the number did not add up towards total income. So, I am curious is there a different way to do it?

[DavidD66]

You will report the earnings on the excess contribution as other income, but not until next year.  It will be reported on your 2026 1099-SA, and you will report it on your 2026 tax return.  

[user17738757212]

Thank you for your response. I am already reporting on my 2025 return that I made excess contribution to my 2025 HSA (As per my understanding I will be charged 6% annually if I do not do that). That means turbotax is already calculating excess contribution amount as part of my total income.  My confusion is that if I wait for 1099-SA until next year, the excess contribution will be used again while calculating total income for 2026, so I will be paying taxes on that amount in 2026 as well. So, if possible I want to get it done this year itself as I know the correct amount and read somewhere I do not need to wait for the 1099-SA.

[DavidD66 · Accepted solution]

No, the excess contribution won't be included in your 2026 income.  You removed it before the due date of your tax return, so it's as if it never happened.  The earnings on the excess contribution were withdrawn/received in 2026, so they are reported on your 2026 tax return.  According to the IRS Instructions for Form 8889:

Excess Contributions You Make

To figure your excess contributions (including those made on your behalf), subtract your deductible contributions (line 13) from your actual contributions (line 2). However, you can withdraw some or all of your excess contributions for 2025 and they will be treated as if they had not been contributed if:

• You make the withdrawal by the due date, including extensions, of your 2025 tax return (but see the Note under Excess Employer Contributions, later);
• You do not claim a deduction for the amount of the withdrawn contributions; and
• You also withdraw any income earned on the withdrawn contributions and include the earnings in “Other income” on your tax return for the year you withdraw the contributions and earnings.

[user17738757212]

Thank you for the clarification. That makes total sense. Does that mean the 1099-SA reports only the earnings amount and not the excess contribution amount?

[DavidD66 · Accepted solution]

The excess contribution will be reported on the 1099-SA, but it will be reported with code 2 in box 3 - Excess Contributions: Used when withdrawing excess contributions (and earnings) from your HSA.  With this code, the only thing that is taxed is the earnings on excess contributions. Other than that, it won't have any impact on your taxable income.  This is assuming you notified the HSA Administrator that the distribution was to remove an Excess Contribution and that they code it correctly.  

[user17738757212]

Thank you.