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Level 1
posted May 14, 2021 11:34:57 AM

How to report that I removed the excess contribution to HSA?

I contribute to my HSA through payroll deduction. I was informed by my payroll accountant that I had an excess contribution of $80 for 2020 and to contact the HSA custodian to remove the excess contribution. I sent a form to my HSA custodian to remove the excess contribution and they withdrew $80 plus $0.05 interest from my HSA account and deposited it into my bank account on February 2021. My payroll accountant says I don't need a corrected W-2. My HSA custodian has not sent a special 1099-SA to me and the 5498 will not be sent until May 31 which they say is for my records and not needed for filing my taxes. So my current W-2 box 12 shows $3,630 (max contribution limit is $3,550), I already withdrew the $80 (plus interest) excess contribution from my HSA account, how do I file my taxes showing that I withdrew the excess contribution so I won't be penalized?

 

Edit to add: Nevermind, it looks like my question was answered by the intelligent Exployee Tax Expert, BillM223, in another post. The answer was:

"When TurboTax tells you there is an excess and you tell TurboTax that you will withdraw it before the due date of the return, then TurboTax will put this withdrawn excess on line 14b of form 8889. This is how the IRS knows that you withdrew it in time.

 

If you cured the excess by withdrawing it in time, then please do NOT answer Yes to the question about overfunding the HSA in the previous year."

 

Thank you for the help!

0 1 496
1 Replies
Level 15
May 14, 2021 11:46:49 AM

on the turbotax 8889 screen enter the $80 on line 12B

(12A will show the $80 and 12C should be $0 after entering 12B)